Ringgit advances as traders brace for rate hike

Ringgit advances as traders brace for rate hike
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KUALA LUMPUR (Nov 10): Ringgit climbs to highest in seven weeks after Bank Negara Malaysia signaled that it may tighten policy amid sustained growth and quicker inflation.

* USD/MYR drops 0.3% to 4.1920, lowest since Sept. 25

** Support 4.1875, 4.1825; resistance 4.2440, 4.2535, 4.2561

* Malaysia’s central bank also said Thursday that headline inflation for 2017 is expected to be at upper end of the forecast range

* 3-year yield jumped 5bps to 3.54% Thursday; 10-year yield surged 10bps to 4.15%

* Still, BNM is unlikely to be in a rush to tighten, given policy uncertainties ahead of a general election, prospects of easing inflation next year and a probable slowdown in exports in near term, Goldman Sachs analysts Goohoon Kwon and Irene Choi wrote in report Thursday

** In the past, changes in wording of BNM’s policy outlook didn’t signal immediate rate changes

* Data due next week include 3Q GDP and current-account balance