Ringgit falls third day as rate cut bets grow

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SINGAPORE (March 15): Malaysia’s ringgit weakens for a third day amid speculation the central bank will cut interest rates this year.

* USD/MYR rises 0.1% to 4.0930, approaching a one-month high of 4.0970 set on March 8; pair is still capped by 200-DMA currently at 4.1034

* ING now forecasts Bank Negara Malaysia will cut rates as soon as next quarter, scrapping its early prediction that the central bank will stay on hold this year, according to a client note published Thursday

** January’s inflation data showing CPI fell 0.7% y/y, the first negative reading in almost a decade, has opened the door for a more accommodative policy setting

** Exports and manufacturing drive GDP and their slowdown in January foreshadow a further growth slowdown this quarter

* Industrial production rose 3.2% y/y in Jan. vs forecast of 2.3%, while manufacturing sales value increased 7.0% y/y vs 7.5% in December, Department of Statistics said Thursday

* Size of Malaysia’s capital market rose to RM3.1t at the end of 2018, equivalent to 2.2 times the economy, Securities Commission said in its annual report Thursday