Ringgit in narrow range with focus on Fed, tariffs

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KUALA LUMPUR (Aug 1): Malaysia’s ringgit stays in a narrow range as traders await this week’s Federal Reserve meeting and developments in the US-China trade dispute.

* USD/MYR little changed at 4.0640 after rising 0.7% in July

** Support 4.0413, 4.0188, 4.0083; resistance 4.0761, 4.0817, 4.0883

* Earlier advance in USD/MYR has been capped due to recent dollar weakness and as gains in US stocks have supported risk currencies in Asia, says Mingze Wu, FX trader at INTL FCStone in Singapore

** New wave of risk aversion would propel USD/MYR out of its 4.06-4.07 range, and this may come in the form of China’s retaliation against US tariffs

** Next level to watch is 4.10-4.15, but dollar bulls will want to see pair above 4.20 for a stronger indication of a bull trend

* 10-year government bond yield little changed at 4.08%

* Investors should buy Malaysia’s 20-year bonds for yield pick-up amid a stable policy stance, Standard Chartered says

* Officials are probing if former PM Datuk Seri Najib Razak’s government used funds from China-backed infrastructure program to help pay almost US$700 million of debt owed by state investment fund 1MDB: Wall Street Journal

* Nikkei Malaysia July Manufacturing PMI 49.7 vs 49.5 in June

* Bills to introduce sales and services tax were tabled for first reading in parliament Tuesday

** Levy will replace Goods and Services Tax Act that government will abolish

* Govt to postpone third phase of Mass Rapid Transit rail line pending a review of construction costs: Transport Minister Anthony Loke

* PM Tun Dr Mahathir will meet China’s Minister of Foreign Affairs Wang Yi