Ringgit extends weekly drop as resurgent USD weighs

Ringgit extends weekly drop as resurgent USD weighs
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KUALA LUMPUR (May 4): Ringgit extends a fifth weekly drop, longest losing streak in more than two years, as the dollar strengthens and crude prices fall.

* USD/MYR gains 0.1% Friday to 3.9360, having climbed 0.4% this week

** Support 3.8465, 3.8000, 3.7310; resistance 3.9413, 3.9430, 3.9640

* If the ruling coalition wins next week’s general election, this would imply policy continuity and support gains in the ringgit, says Andy Ji, Asia currency strategist at CBA in Singapore

** Still, downside for USD/MYR will be limited above 3.80 in the near term as foreign appetite for local-currency bonds has diminished after the central bank’s crackdown on trading in non- deliverable forwards

* Exports +2% in March y/y vs -2% in Feb.: Bloomberg survey before data due at noon local time

** March trade surplus RM9.5b vs RM9.02b : survey 

* Govt auction of 3b ringgit of 2033 bonds closes at 11.30am local time

* CIMB says 3Q fair value for 3-year bonds is 3.55%, 10-year is 4.05%, analysts including Nik Mukharriz wrote in note Thursday

** Co. maintains overweight call on 3-year versus 10-year debt for a bullish steepener with spread of 50bps

* 10-year yield little changed at 4.14%; 3-year yield at 3.70%

* Opposition leader Mahathir Mohamad is under investigation for a potential breach of a new fake news law, police said Thursday as the nation gears up for the May 9 election