SINGAPORE (Jan 8): Ringgit strengthens to fresh 16-month highs as oil prices and Asian stocks continue to advance.
* Combination of USD weakness and firming oil prices appears to have been enough to break psychological support in USD/MYR, Stephen Innes, head of trading for Asia Pacific at Oanda, writes in note
** While MYR should continue to strengthen on a “benevolent” Fed outlook and rallying energy prices, market has most likely sufficiently priced in a BNM January rate hike, so pace of appreciation may slow
** Profit taking expected to set in ahead of this month’s rate decision
* NOTE: Bank Negara Malaysia due to decide on policy rate on Jan. 25
* USD/MYR declines as much as 0.3% to 3.9873, lowest since August 2016
** The pair slid 1.2% last week, the most since the period ended Sept. 8
** 14-day RSI drops to 15, deep in over-extended territory
** MSCI Asia Pacific excluding Japan Index gains 0.2% following a 3.1% weekly jump
** WTI crude futures up 0.3%
* Malaysia will suspend export duties on crude palm oil for three months to combat price drop, according to Plantation Industries and Commodities Minister Mah Siew Keong * Opposition Pakatan Harapan names Mahathir as candidate for prime minister
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