Thursday 28 Mar 2024
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KUALA LUMPUR (Nov 23): Ringgit climbs for a fifth day after the dollar slumped amid uncertainty about the outlook for Federal Reserve tightening next year.

* USD/MYR declines 0.3% to 4.0980; reached 4.0965, lowest since October 2016

** Support 4.0962, 4.0945, 4.0360; resistance 4.1990, 4.2440, 4.2535

* EM Asian FX are gaining as the dollar comes under pressure after a disappointing U.S. durable goods report and Fed minutes showed growing division about the outlook for policy, says Christopher Wong, senior FX strategist at Maybank in Singapore

** Still bigger picture remains unchanged with a synchronized economic recovery and demand for tech products that’ll bode well for Asian exports

* Ringgit bulls are betting the currency’s rally has more room to run thanks to BNM’s hawkish bias but others say an upcoming general election may complicate the timing for a rate hike, damping a key driver for MYR

* BlackRock is tactically overweight MYR, a position which can stay for a quarter or two, as the market has been pricing in more than one rate hike, Neeraj Seth, co.’s head of Asian credit said Wednesday
** Co. expects one increase in next 6 months

* 10-year bond yield falls 1bp to 3.95%

* Malaysia’s foreign-exchange reserves unchanged at $101.5b as at Nov. 15, BNM data showed Wednesday

* EM sentiment remains favorable and with investors still flush with cash and hungry for yield, the attractive yield/vol ratio of EM FX will bring in more buyers, Credit Agricole strategists led by Sebastien Barbe wrote in a note Wednesday

** On the other hand, with continuing gains at the short end of U.S. curve, EM rates are likely to be under upward pressure especially with some Asian central banks turning increasingly hawkish

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