Ringgit advances as weak dollar boosts Asia FX

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KUALA LUMPUR (Aug 21): Ringgit climbs for a second day as the dollar declines after US President Donald Trump criticized the Federal Reserve’s interest-rate increases.

* USD/MYR falls 0.2% to 4.0940 after dropping 0.1% Monday

** Support 4.0491, 4.0413, 4.0083; resistance 4.1093, 4.1230, 4.1355

** Dollar drops after Trump complained about the Fed’s tightening and accused China and the EU of manipulating their currencies

* Dollar and trade-war concerns will remain key drivers of ringgit, says Mingze Wu, FX trader at INTL FCStone in Singapore

** Markets are still awaiting details on how Malaysia’s govt will pare its debt, with focus on measures to boost revenue after authorities scrapped a consumption tax and wrote off fines for traffic offenses

* Nation’s 10-year bond yield falls 2bps to 4.04%

* Central banks of China and Malaysia renewed local currency swap agreement for 3 years to facilitate trade and investment: PBOC

* Tun Daim Zainuddin, an adviser to PM Tun Dr Mahathir Mohamad, reiterated his view that the East Coast Rail Link project isn’t viable as the cost is too high

* Advisory council will submit report to Dr Mahathir with recommendations including alternative tax mechanisms and new framework for investment incentives

* FX reserves data for first two weeks of August due at 3pm local time; no forecast, holdings dropped 0.1% to US$104.5 billion in period ended July 31