Market Sentiment Doesn’t Favor Risk, Ringgit Suffers

The Malaysian ringgit fell today as risk aversion eroded the appeal of higher-yielding currencies associated with risk. The market sentiment was hurt by prospects of early monetary tightening from the Federal Reserve.

Last week’s comments from the Fed showed the US policy makers are considering to start raising interest rates earlier than was planned previously, allowing the dollar to rally. Consequently, currencies of emerging markets, including the ringgit, suffered. There is also a problem of geopolitical uncertainty as the leaders of Russia and Ukraine will meet for peace talks tomorrow.

USD/MYR rose from 3.1615 to 3.1625 as of 12:28 GMT today, reaching the high of 3.1709 intraday.

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