Ringgit rebounds as dollar remains on back foot

-A +A

KUALA LUMPUR (Sept 6): Ringgit gains for the first time in six days as the dollar extends losses and most emerging-market currencies stabilize.

* USD/MYR drops 0.1% to 4.1435 after rising 1.2% in last five sessions

** Support 4.0900, 4.0719, 4.0413; resistance 4.1533, 4.1645, 4.2437

* EM Asian FX will be tested again as President Trump weighs additional tariffs on Chinese imports and a report on U.S. non-farm payrolls looms, says Christopher Wong, a senior FX strategist at Maybank in Singapore

** Currencies which are backed by current-account surpluses and ample FX reserves, such as SGD, KRW and THB, may be relatively stable

** IDR, PHP and INR will be less resilient, although some of these currencies may have already been oversold 

* 10-year govt bond yield is steady at 4.19%, highest since early July

* Malaysian financial markets remain resilient despite outflows and the central bank will ensure sufficient liquidity for FX and money markets, BNM said Wednesday as it kept interest rates unchanged

** Central bank flagged risks to growth including trade tensions and weakness in the mining and agriculture sectors

* BNM will probably remain on hold through 2019 to provide some support to MYR as U.S. interest rates continue to rise, RHB economist Vincent Loo wrote in note Wednesday

** Policy risk is tilted slightly to the downside due to slowing growth and subdued inflation

* Malaysia’s fiscal performance isn’t expected to deteriorate materially in next few years mainly because of the government’s strong focus on fiscal stability: S&P

* Malaysia will implement a uniform minimum wage rate of RM1,050 a month from January 2019: PM’s office

* Singapore and Malaysia have agreed to delay a bullet-train project by four years, the two governments said Wednesday