KUALA LUMPUR (Aug 21): Ringgit trades near one-week high after 2Q economic growth reported on Friday beat expectations and the central bank said full-year expansion will probably top the official forecast.

* USD/MYR steady at 4.2895; reached 4.2847 on Friday, lowest since Aug. 9

** Support 4.2859, 4.2760, 4.2663; resistance 4.3022, 4.3055, 4.3222

* NOTE: 2Q GDP +5.8% y/y, fastest pace in 2 years and vs forecast of 5.4%

** BNM Governor Muhammad Ibrahim said Friday that growth will probably exceed the official forecast of 4.8% this year

* Better-than-expected GDP and C/A surplus data may provide limited support for MYR as Asian FX are likely to trade on a defensive note ahead of Jackson Hole symposium, says Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore

** If markets are caught wrong-footed by sudden risk-off or dollar rebound, 4.30 is well within striking distance for USD/MYR

* UOB sees USD/MYR reaching 4.26 by year-end as stronger macroeconomic data support a firmer ringgit, economist Julia Goh wrote in note Friday

** Forecast also premised on reduced expectations for a hawkish Fed following weaker U.S. inflation dynamics

* 10-year govt bond yield fell 3bps last week to 3.98%

* Goldman Sachs raises its forecast for Malaysia’s 2017 GDP growth to 5.4% from 5.2% following 2Q data, analysts Mallika Chawla and Goohoon Kwon wrote in note Friday

** Co. continues to expect BNM to remain on hold in 2017 with private consumption likely to support steady growth

* BNM will take to task international banks that are licensed in Malaysia which help facilitate trade of ringgit futures in Singapore, BNM Governor Muhammad said Friday

* Data on foreign-exchange reserves for mid-August due Tuesday; holdings rose 0.3% to 2-year high of $99.4b in the final two weeks of July