Ringgit halts 2-day loss as oil extends advance

February 13, 2019 editor

KUALA LUMPUR (Feb 13): Ringgit rises for the first time in three sessions as broad dollar weakness and rising crude prices burnish the appeal of Malaysian assets.

* USD/MYR down 0.3% to 4.0652 and fell as low as 4.0623 earlier

** Support 4.0550, 4.0435; resistance 4.1045, 4.1403, 4.1512

** NOTE: Ringgit has strengthened 1.7% since the start of the year, biggest gain in Asia after THB and IDR

** Bloomberg Dollar Spot Index little changed after slipping 0.3% on Tuesday

* Ringgit’s recent strength was likely fueled by equity inflows and repatriated funds from state energy firm Petronas to pay the one-off special dividend to the government, Julia Goh, economist at United Overseas Bank, wrote in note Tuesday

** Ringgit remains undervalued compared with its peers, and ringgit assets may offer a safe haven as some Asian countries head into elections in 1H

* 10-year yield rises 1bp to 3.998%

* Govt will sell ¥200 billion of Samurai bonds next month at maximum coupon rate of 0.65%: Finance Minister Lim Guan Eng

* Foreign holdings of Malaysian government and corporate bonds and bills fell 1.3% month-on-month to RM182.5 billion in January, lowest since March 2017: central bank data

* Latest bout of outflows is somewhat puzzling given recent ringgit gains and inflows into regional markets, says Winson Phoon, head of fixed-income research at Maybank Kim Eng Securities in Singapore

** Still, it’s worth noting that bond flows have been less correlated with ringgit’s movements, and latest outflow could be due to adjustment of positions, with some investors taking a more constructive view of other markets

* Malaysia is in ongoing discussions with the relevant parties on the East Coast Rail Link project: PM Tun Dr Mahathir Mohamad said Tuesday

* Malaysia AG wants Datuk Seri Najib Razak’s 1MDB trial to start Feb 25: Bernama

Source: TheEdgeMarkets