Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 23): Ringgit halts four days of gains on broad strength in the dollar and a retreat in crude prices.

* USD/MYR is little changed at 4.2825; reached 4.2790 Tuesday, lowest since Aug. 4

** Support 4.2760, 4.2663, 4.2505; resistance 4.3022, 4.3055, 4.3193

** Bloomberg Dollar Spot Index climbs 0.1% after gaining 0.3% Tuesday

* BNM has been keeping a tight rein on the MYR and its recent rangebound trade reflects a "truce" between speculators and the central bank where neither side is willing to yield ground nor commit further, says Wu Mingze, a currency trader in Singapore at INTL FCStone

** Still, if broad strengthening trend for Asian FX continues, speculators are unlikely to want to hold long USD positions

* USD/MYR has been stable at around 4.30 and may find it hard to fall much further in the near term, HSBC analysts including Paul Mackel wrote in note Tuesday

** Malaysia may take a while to rebuild its FX reserves as its small current account surplus is narrowing and there’s a risk of modest portfolio outflows as govt bonds mature

* Consumer prices +3.4% in July y/y vs 3.6% in June: Bloomberg survey before data due at noon local time

** NOTE: Malaysian inflation has eased since reaching 5.1% in March, the fastest in more than 8 years

* BNM is expected to keep policy on hold this year as it’s unlikely to tighten on temporarily faster inflation, while a recent improvement in the economy eliminates the need for a rate cut, Credit Agricole EM strategist Samsara Wang wrote in note Tuesday

 

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