StanChart takes profit on short USD/RM, still upbeat on ringgit

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KUALA LUMPUR (Sept 29): Standard Chartered takes profit on its short USD/RM trade after the pair hit its revised stop-loss of 4.23 on a broad rebound in the dollar, Asia FX strategist Divya Devesh wrote in note Thursday.

* Initiated trade on Sept. 6 based on view of attractive valuations, solid fundamentals and strong exports

* Remains bullish on RM; sees USD/RM declining to 4.10 by year-end

* Will look for opportunities to express bullish ringgit view as currency is among the most undervalued EM FX

* Foreign investors’ positioning remains “extremely light” in historical context

* RM sentiment has improved onshore with better USD supply dynamics

* NOTE: USD/RM falls 0.1% to 4.2275; ringgit gained 1% vs USD in September, best performer among Asian peers