Friday 29 Mar 2024
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KUALA LUMPUR (Sept 8): Ringgit heads for its biggest weekly gain in a year as the dollar extends declines and traders bet on an improving Malaysian growth outlook.

* USD/MYR drops 1.8% this week to 4.1950, set for its biggest 5-day decline since July 2016; falls 0.4% Friday

** Support 4.1733, 4.1442; resistance 4.2262, 4.2505, 4.2843

** NOTE: BNM said Thursday Malaysia’s growth in 2017 will be better than expected, underpinned by an improved global outlook and strong domestic demand

* MYR’s rally is a replay of its gains in late April when what started as a technical breakout was later fueled by fundamentals, says Peter Chia, an FX strategist at United Overseas Bank Ltd. in Singapore

** EM Asian FX’s gains Friday may be short-lived as investors take profit ahead of a possible missile test from North Korea this weekend

* Despite its surge Thursday, ringgit remains undervalued in terms of either the nominal effective exchange rate or real effective exchange rate, Scotiabank strategist Qi Gao writes in note

** USD/MYR is expected to head for 4.00 in the coming months

* Maybank pegs USD/MYR’s fair value at 3.80 and sees a gradual return in stability as fiscal consolidation gains traction and oil prices recover, strategists led by Saktiandi Supaat write in note

* Yield on govt debt due November 2027 fell 1bp to 3.85% Thursday, lowest since notes were sold in May

* AllianceBernstein remains cautious on local-currency Malaysian and Philippine debt “despite their relatively attractive yield level as fundamental factors are unlikely to change soon to support an entry strategy,” says Anthony Chan, an Asian sovereign strategist in Hong Kong

* HSBC sees BNM keeping the overnight policy rate and statutory reserve ratio on hold for the rest of the year, according to note Wednesday

 

 

 

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