And The Ringgit Goes Slip Sliding Away Against The US Dollar

Published on Business Times:

• Ringgit may hit 3-year low: StanChart
  
  Published: 2008/12/04
  
  MALAYSIA's ringgit may decline to a three-year low against the dollar should it fall below so-called support at 3.6410, said Standard Chartered Plc, citing technical charts that predict price movements.
  
  The support level at 3.6410 is a 76.4 per cent retracement of the ringgit’s advance from a low of 3.80 in July 2005 to a high of 3.127 in April 2008, said Thomas Harr, a senior currency strategist at Standard Chartered, referring to a series of numbers known as the Fibonacci sequence. Support refers to an area where buy orders may be clustered.
  
  “If you see a break of this last Fibonacci level, then there basically are no levels before 3.80,” Singapore-based Harr said in a Bloomberg News interview. “The ringgit will continue to be under pressure.”
  
  The ringgit traded at 3.6395 per dollar as of 3:39 pm in Kuala Lumpur, compared with 3.6400 yesterday, according to data compiled by Bloomberg. The currency has weakened 9 per cent this year, headed for its first annual loss since 1999.
  
  Malaysia’s government scrapped the ringgit’s peg of 3.80 to the dollar in July 2005, allowing it to trade freely in a managed float against a basket of currencies of the nation’s major trading partners.
  
  Fibonacci analysis is a mathematical formula based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break of one indicates a currency may move to the next. A failure suggests a trend may stall. Other Fibonacci points include 50 per cent and 61.8 per cent.
  
  In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders. - Bloomberg ( Source: here )

And here is the market closing notes on the ringgit.

• FOREX: Ringgit Closes At 3.63 Against US Dollar
  
  KUALA LUMPUR, Dec 4 (Bernama) -- The ringgit closed flat today against the US dollar on thin commercial demand from foreign and local traders, dealers said.
  
  At close, the local currency was quoted at 3.6380/6410 with very little difference from yesterday's closing of 3.6380/6420.
  
  The dealer said players took a cautious stance over the speculation of the European Central Bank's decision to cut interest rate by half a percentage point today.
  
  "If they cut interest rate, it will help the dollar to go higher," he said.
  
  The local unit was mixed against other major currencies.
  
  It was lower against the Singapore dollar at 2.3784/3813 from 2.3779/3826 yesterday but higher against the yen at 3.9144/9188 from 3.9156/9212 previously.
  
  The ringgit rose against the British pound to 5.2849/2904 from 5.3708/3785 yesterday and also against the euro to 4.5795/5844 from 4.5966/6020. (Source: http://bernama.com.my/bernama/v5/newsmarket.php?id=376432 )

Will the ringgit be an issue?

For me it will be a massive issue!

Far too many local corporates had taken far too huge loans denominated in the USD!