Ringgit halts three-day drop before Fed minutes

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KUALA LUMPUR (April 9): Ringgit halts a three-day decline as investors await Federal Reserve minutes due Wednesday. A rally in oil prices fails to boost the currency.

* USD/MYR little changed at 4.0965 after rising 0.5% during previous three days; support 4.0740, 4.0545, 4.0435; resistance 4.1045, 4.1216, 4.1460

* Pair is expected to drop to 3.90 this quarter and 3.80 by year-end, RHB says in report

** Ringgit will probably strengthen as a potential rate cut by Bank Negara Malaysia (BNM) would be preemptive, and boost the bond market as well as growth

* Asia FX are likely to take their cues from US-China trade talks, as well as outcomes of the Indian and Indonesian general elections, says Dawn Kwa, Asia FX and interest rates strategist at BNP Paribas in Singapore

** Regional central banks including RBI and BSP have gradually turned more dovish as growth slows and this may erode some of the carry against US dollar

* Malaysia’s 10-year bond yield holds at 3.79%

* Govt will set the digital service tax at 6% from Jan 1, the Edge reports, citing Deputy Finance Minister Amiruddin Hamzah

* Mission led by Indonesia and Malaysia to Brussels registered its opposition to the European Union’s Delegated Act on palm oil use in biofuels, saying the move was a political strategy to remove the commodity from the EU marketplace

* BNM’s proposed additional capital requirement for systemically important banks is credit positive, Moody’s analysts wrote in report Monday