Ringgit at 3.8920 vs US dollar as traders brace for BNM rate hike

 Ringgit at 3.8920 vs US dollar as traders brace for BNM rate hike

Ringgit at 3.8920 vs US dollar as traders brace for BNM rate hike

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KUALA LUMPUR (Jan 25): Ringgit climbs to highest in almost two years after the dollar tumbled and traders brace for Bank Negara Malaysia to raise interest rates.

* USD/MYR falls 0.3% to 3.9020; reached 3.8920, lowest since April 2016

** Support 3.9038, 3.8465, 3.8170; resistance 4.0055, 4.0465, 4.0583

** BNM will increase the policy rate by 25bps at Thursday’s review, according to 16 of 20 economists in a Bloomberg survey before decision due at 3pm local time

* Should BNM deliver a dovish hike, the market will probably ignore such a tone as the growth and inflation outlook continues to improve heading into the general election, says Andy Ji, Asia currency strategist at Commonwealth Bank of Australia in Singapore

* “The technical picture bodes well with further downside to USD/MYR, although muted capital inflows remain the Achilles’ heel for the domestic currency”

* Still, Goldman Sachs expects BNM to hold fire at Thursday’s review with a rate increase likely to take place only in 3Q after the general election, economists Goohoon Kwon and Irene Choi wrote in note Wednesday

** Expects no hike on Thursday as changes in wording of the policy outlook section of past decisions have not always signaled immediate rate changes 

* 10-year yield ended unchanged at 3.94% Wednesday

* Govt to auction RM2.5b of 2033 bonds on Friday

* Collections from Malaysia’s goods and services tax may reach RM45b in 2018 vs RM44b in 2017, New Straits Times cites PM Najib Razak as saying 

* Negotiators in the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership have agreed to Malaysia’s request for extra flexibility in the upstream oil and gas sector: Trade and Industry Minister Mustapa Mohamed