Ringgit touches two-week low amid emerging market FX losses

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KUALA LUMPUR (Dec 17): Ringgit drops to a two-week low after the US dollar strengthened on Friday and trade tensions weighed on emerging-market currencies.

* USD/MYR little changed at 4.1880 after climbing to 4.1898, highest since Nov 30

** Resistance 4.2020, 4.2437, 4.2531; support 4.1392, 4.1227, 4.0900

* Ringgit may underperform other regional FX in the near term as global funds continue to sell Malaysian assets amid the recent decline in oil prices, says Khoon Goh, head of Asia research at ANZ in Singapore

** Disappointing 3Q GDP growth and deferment of infrastructure projects will weigh on exports and FDI flows

** Near-term resistance is 4.2000, with support at 4.1733

* The ringgit may regain some ground next year and rise to 3.80 by end-2019 as Malaysia’s current-account surplus widens, RHB said in note Friday

** Surplus is expected to reach 2.5% of GDP in 2019 from an estimated 2.2% this year as commodities recover and a deferment of large infrastructure projects caps imports

* 10-year government bond yield drops 1bp to 4.10%

* Malaysia’s benchmark stock index is expected to gain next year amid a recovery in consumer spending and foreign inflows, according to analysts

* Tan Sri Isa Samad, ex-chairman of state plantation company FELDA, was charged Friday with corruption and criminal breach of trust, according to official news agency Bernama