KUALA LUMPUR (Feb 25): Ringgit climbs to the strongest in almost seven months as risk appetite gets a boost after the U.S. agreed to extend a tariff deadline on Chinese goods beyond this week.

* USD/MYR falls 0.3% to 4.0635; reached 4.0615, lowest since Aug. 1

** Support 4.0550, 4.0435; resistance 4.1045, 4.1249, 4.1463

** NOTE: USD/CNH drops as much as 0.5%

* EM Asian FX will gain momentum as CNH may have more room to appreciate, says Ken Cheung, a senior Asian FX strategist at Mizuho Bank

** Still, risks remain with uncertainties over Brexit and upcoming China manufacturing PMI which may confirm slowing growth

* Malaysia’s 10-year govt bond yield rose 1bp to 3.90% Friday

* Consumer prices fell 0.7% in January y/y, the first contraction since 2009, according to govt data released Friday 

* Malaysia’s official 2019 inflation forecast may be revised after the latest CPI print, but unless GDP growth falls below 4%, BNM is unlikely to ease policy, Citigroup economists Wei Zheng Kit and Kai Wei Ang wrote in note 

** As policymakers are avoiding “an activist approach” in monetary policy and there’s a risk of household re-leveraging, low inflation alone is not yet enough to fuel a rate cut

* Foreign-exchange reserves +0.2% to $102.3b in the first two weeks of February: central bank data

* Govt said Saturday it’s in talks to acquire several highway concessions and revamp toll charges, as part of the ruling coalition’s efforts to fulfill its election pledges

* Philippines plans to limit palm oil imports from Malaysia and Indonesia, after a surge in supply over the past three years hurt its coconut industry: Agriculture Secretary Emmanuel Pinol

* U.S. Justice Dept said Friday it’s seeking to recover another $38m in assets allegedly linked to Malaysian state fund 1MDB, taking assets subject to forfeiture in the case to ~$1.7b

* Former PM Najib Razak is set to appear in court March 13 for case management over 7 charges linked to 1MDB, High Court ruled on Friday