HONG KONG (Jan 28): The Thai baht looks primed to perform better than the Malaysian ringgit in 2019. The ringgit is on course for its largest two-day gain vs USD since Jan. 4, in line with the broader strength in Asian currencies, that Mark Cranfield highlighted. 

But there are signs of disunity within Malaysia's ruling coalition, on the $20 bln China-backed rail project, with Economics Affairs Minister Azmin Ali terminating it and then Finance Minister Lim Guan Eng suggesting the decision isn't final. That sends a confusing message to investors. 

And cancelling important mega projects doesn't bode well for activity, FDI and employment, especially when Malaysia's PMI, trade and output data are all indicating a growth slowdown.

In contrast, Thailand's FX reserves, manufacturing and trade growth all demonstrate its economic resilience to a tougher external environment. The nation's current account balance, due later this week, is forecast to more-than-double November's surplus. The baht's strength can continue, especially after USD/THB recently broke its five-year uptrend. 

THB/MYR closed at a fresh record high on Friday -- expect that phrase to be repeated frequently in the weeks ahead.