Ringgit drops to 4-month low as lower oil hurts

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KUALA LUMPUR (May 30): Ringgit falls to lowest in more than four months as a stronger dollar and lower crude prices curb demand for Malaysian assets.

* USD/MYR climbs 0.2% to 3.9915; reached 3.9920, highest since Jan. 11

** Support 3.9430, 3.9161, 3.8533; resistance 4.0060, 4.0155, 4.0604

** Onshore markets were shut Tuesday for a holiday

** BBDXY trades near 6-month high; Brent -0.2%, taking this week’s loss to 1.4%

* In near term, USD/MYR is expected to head for 4 followed by 4.05 on a falling EUR/USD and risk aversion arising from Italy’s political developments, says Mingze Wu, an FX trader at INTL FCStone in Singapore

** Markets will be watching to see if PM Mahathir Mohamad’s “promise of intervention against ‘market disruption’ has any bite”

* 5-year sovereign bond yield climbed 2bps to 3.9% Monday

* Auction of RM4b of 2023 Islamic govt bonds closes at 11:30 am local time

* PM Mahathir said Monday he’ll cancel a proposed multibillion- dollar high-speed railway link to Singapore as the project will not reap any profits for Malaysia

* Former Treasury Secretary-General Mohd Irwan Serigar Abdullah is no longer a member of the central bank’s board of directors: BNM