Ringgit wilts under weight of strong USD, weak oil

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KUALA LUMPUR (Mar 1): Ringgit falls for a third day as the dollar extends gains and energy prices lose further ground.

* USD/MYR climbs 0.2% to 3.9240

** Support 3.8663, 3.8465, 3.8170; resistance 3.9430, 3.9670, 4.0055

** BBDXY +0.1%; Brent crude -1%

* Stronger dollar and lower oil prices are weighing on the ringgit but BNM’s pre-emptive interest-rate hike in January will provide some buffer for MYR, says Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore

** Sentiment may also be helped by govt’s plan to shut state investment fund 1MDB

** NOTE: 1MDB Chairman Irwan Serigar Abdullah said the fund will be closed after debts are paid with revenue from government projects, New Straits Times reported Wednesday

* January CPI +2.7% y/y vs est. +2.8% and +3.5% in December, official data showed Wednesday

* February manufacturing PMI 49.9 vs 50.5 in January: Nikkei and Markit Economics

* Malaysia’s GDP may expand 5.4% this year, according to economists surveyed by Bloomberg, higher than the 5.2% estimated earlier. That compares with 5.9% last year

* Credit Agricole recommends a cautious stance toward emerging markets in the days ahead as seemingly more hawkish rhetoric from Federal Reserve Chair Jerome Powell could raise short-term concerns, strategists led by Sebastien Barbe wrote in note Wednesday

* Environment remains supportive in the medium term; focus in Asia will be on China’s economic targets and the appointment of a new PBOC governor: note