Ringgit halts four-day gain as dollar revives

Ringgit halts four-day gain as dollar revives
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KUALA LUMPUR (Jan 16): Malaysia’s ringgit snapped a four-day advance as the U.S. dollar appreciated against most Asian currencies following its slide over the past week.

* USD/MYR climbs 0.2% to 3.9635 after earlier falling to 3.9507, lowest since July 2016

** Support 3.9418, 3.9300, 3.9038; resistance 4.0465, 4.0965, 4.0979

* MYR weakened even after Brent jumped 0.6% to $70.26 Monday, highest close since December 2014

** Malaysia derives 14% of revenue from oil-related sources

* Asia ex-Japan FX have room to gain further as the dollar will probably remain subdued due to expectations for a wider U.S. budget deficit and central banks’ diversification away from USD, says Christopher Wong, a senior currency strategist at Malayan Banking

** In coming weeks, markets will be focused on policy reviews by BOK, BI, BOJ and ECB

* Malaysia’s 10-year bond yield rose 1bp Monday to 3.85% 

* Investors may take profit on 10-year bonds as the yield falls toward 3.80%, CIMB strategists including Nik Mukharriz wrote in report Monday

** Govt bonds are likely to remain well supported this week due to the stronger ringgit, but further upside will be capped amid caution heading into BNM’s policy review on Jan. 25

* Govt to auction 15-year bonds by month-end: central bank

* Global funds bought net RM772.2m of Malaysian stocks in week ended Jan. 12, vs RM915.5m in preceding week: MIDF Amanah Investment