Ringgit rises to four-month high as Brent nears US$60

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KUALA LUMPUR (Jan 8): Ringgit advances to the strongest in more than four months as the dollar extended losses and a recovery in oil prices gained traction.

* USD/MYR drops 0.1% to 4.1110; reached 4.1068, lowest since Aug 30

** Support 4.0900, 4.0677, 4.0614; resistance 4.1521, 4.2020, 4.2437

** NOTE: Brent +0.9% to US$57.84, heading for a seventh day of gains

* USD/MYR’s next key level is 4.10, with the weaker US dollar and rebound in crude auguring well for the ringgit, said Maximillian Lin, an emerging-markets Asia strategist at NatWest Markets in Singapore

** While US-China trade talks ending Tuesday aren’t likely to yield a conclusive outcome, a reaffirmation of the positive tone may be enough to propel a continuation in equity risk momentum

** “For Asia FX, the main uncertainty is whether that will be enough to push USD/Asia past key levels,” says Lin

* Recent dips in EM currencies are an opportunity to add risk, Morgan Stanley wrote in a report

** Co.’s model is long TRY, BRL, RUB and CNY against ZAR, INR, KRW and MYR

* Malaysia’s 10-year govt bond yield ended steady at 4.07% Monday

* Auction of RM3.5 billion of 10-year Islamic govt bonds closes at 11:30am local time

* Foreign reserves were unchanged at US$101.4 billion as of Dec 31

* China offered to help bail out Malaysia’s state fund 1MDB in 2016, the Wall Street Journal reported, citing minutes from meetings it reviewed

* A Malaysian court denied bail for ex-Goldman Sachs banker Roger Ng who was charged for his role in 1MDB deals