Ringgit rally runs aground as dollar advances

KUALA LUMPUR (Jan 4): Ringgit halts five days of gains as the dollar rallies on stronger economic data and the latest Fed minutes indicating support for continued rate hikes.  * USD/MYR strengthens 0.2% to 4.0217; dropped 1.7% in past five days  ** Support 4.0000, 3.9300, 3.8465; resistance 4.0465, 4.0965, 4.1369  * Still, there’s a lot more room for MYR to appreciate vs USD as Malaysia’s upcoming general election will drive further gains, says Tetsuji Sano, chief Asia economist at Sumitomo Mitsui Asset Man

KUALA LUMPUR (Jan 4): Ringgit halts five days of gains as the dollar rallies on stronger economic data and the latest Fed minutes indicating support for continued rate hikes. * USD/MYR strengthens 0.2% to 4.0217; dropped 1.7% in past five days ** Support 4.0000, 3.9300, 3.8465; resistance 4.0465, 4.0965, 4.1369 * Still, there’s a lot more room for MYR to appreciate vs USD as Malaysia’s upcoming general election will drive further gains, says Tetsuji Sano, chief Asia economist at Sumitomo Mitsui Asset Man

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KUALA LUMPUR (Jan 4): Ringgit halts five days of gains as the dollar rallies on stronger economic data and the latest Fed minutes indicating support for continued rate hikes.

* USD/MYR strengthens 0.2% to 4.0217; dropped 1.7% in past five
days

** Support 4.0000, 3.9300, 3.8465; resistance 4.0465, 4.0965,
4.1369

* Still, there’s a lot more room for MYR to appreciate vs USD as Malaysia’s upcoming general election will drive further gains,
says Tetsuji Sano, chief Asia economist at Sumitomo Mitsui Asset
Management in Hong Kong

** Ringgit’s real-effective exchange rate remains undervalued,
which means the currency can advance further

* BMI Research raises end-2018 forecast for MYR to 3.90/USD from 4/USD as appreciation trend continues to look bullish from a technical perspective, according to note Wednesday

* 10-year yield rose 1bp to 3.91% Wednesday

* Auction of RM2b of 2037 govt bonds closes at 11:30am
local time

* Flows into EM assets will be supported by strong global demand, healthy EM balance sheets and gradual global monetary tightening, Credit Agricole strategists led by Sebastien Barbe wrote in report Wednesday

** Still, the speed of the appreciation of EM assets vs USD over the past couple of weeks may mean there’s a period of consolidation in the near term