Ringgit hovers near 13-month high ahead of CPI

Ringgit hovers near 13-month high ahead of CPI
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KUALA LUMPUR (Nov 21): Ringgit trades near a 13-month high ahead of a report this week that’s forecast to show Malaysian inflation remained elevated last month, bolstering the case for higher
interest rates.

* USD/MYR little changed at 4.1508; reached 4.1470, lowest since October 2016

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

* October CPI +4.1% y/y vs 4.3% in September, which was the fastest in five months: Bloomberg survey ahead of data due at noon local time Wednesday

* Bank Negara said this month it was considering moving away from an accommodative monetary stance as the economy strengthens

* EM Asian FX are expected to rebound from Monday’s drop, which was fueled by the German crisis, although moves will be limited in the run-up to the Thanksgiving holiday, says Sean Yokota, head of Asia strategy at Skandinaviska Enskilda Banken AB in Singapore

** While risk sentiment remains positive, USD is expected to strengthen heading into year-end as the Federal Reserve raises interest rates

* BNM unveiled further measures to develop the domestic FX market on Monday, including the introduction of interbank bills and allowing lenders to short-sell Islamic govt bonds

* Govt will identify measures to mitigate impact if retail fuel prices keep rising: finance ministry

* Yield on 10-year sovereign notes rises 2bps to 3.99%

* Govt to auction 2b ringgit of 2033 bonds on Wednesday

* Global funds net sold 297.1m ringgit of Malaysian stocks in week ended Nov. 17, biggest five-day outflow in seven weeks: MIDF Amanah Investment

* OCBC has upgraded its 2017 GDP growth estimate for Malaysia to 5.5% from 5.2%

** Expects BNM to deliver at least a one-time rate hike in 2018