Malaysian Ringgit might reverse its recent rally, pushed by a weaker non-farm payroll data from September and no rate hike from US Federal Reserve. Ringgit has gained from 4.48 per USD to 4. 15 per USD as of now.
Oil price has recent slump. Brent is currently trading at $52.9/barrel, which is Malaysia's one of the key exports. However current recovery in oil still not significant enough to reverse the mood in Ringgit. This along with persistent weakness in the economy along with corruption scandal, which has hit current Prime Minister, once again might lead to weakness in the currency. US department of Justice as opened a probe into the transaction that involves Prime Minister Najib Razak. Oil accounts for 30% of the revenue of the government.
- Factory output in Malaysia grew at its slowest pace of 2015 in August. Output rose just 3% from a year ago, missing forecasts at 4.1%t and decelerating from a 6.1% growth in July. This marks the slowest pace of growth since July, 2014
- Manufacturing output rose 4.3%, electricity production jumped 15.9% but mining slipped 3.4%.
Though Ringgit is likely to gain from any further recovery in oil price, it would remain under pressure without any sustainable recovery and might fall once again towards lowest level since 1998.
