Ringgit set for weekly loss amid stock outflows

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KUALA LUMPUR (June 22): Ringgit heads for its biggest weekly decline since February as global funds sell Malaysian stocks and global trade tensions escalate.

* The currency is finding some support Friday as oil prices rise after OPEC and its allies reached a preliminary deal that may result in a smaller actual increase

* USD/MYR drops 0.1% to 4.0120 Friday, paring its weekly advance to 0.7%

** Support 3.9825, 3.9448, 3.9430; resistance 4.0379, 4.0477, 4.0920

** Traders will focus on the OPEC meeting Friday

* Overseas investors have sold Malaysian equities every day since May 2, taking outflows this quarter to US$1.9 billion

** Benchmark KLCI share index extended its drop after entering a so-called technical correction Thursday

* USD/MYR may ease to 4 if UST yields trend lower, as the dollar will consolidate around current levels in the absence of a near-term change in Fed hike expectations, says J. Suresh Sundaram, FX strategist at CIMB in Kuala Lumpur

** Domestic real bond returns are attractive as price pressures remain contained, which would help to cap a further increase in yields

* 10-year yield is steady at 4.21%; it climbed 27bps so far this quarter

* PM Mahathir Mohamad is awaiting the king’s consent on appointment of new BNM Governor, Finance Minister Lim Guan Eng said Thursday

* TRX property project will be completed with RM2.8 billion of government funds, Finance Minister Lim said