KUALA LUMPUR (November 7): Ringgit is recovering after a sharp drop in the past two months against the dollar when Malaysian markets reopened after their holidays.
* USD / MYR fell by 0.2% on Monday to 4.1705 after sliding as much as 0.5%
** the Bloomberg Dollar Spot index is even as much as 0.3% before; measuring flip flops when markets respond to the results of US interim elections; It has fallen in each of the previous two days
** Support 4.1466, 4.1227, 4.0900; resistance 4.1885, 4.1990, 4.2437
* The US political risk can weigh on the dollar on Wednesday, although the upcoming Fed review will correct this weakness, which makes the USD / MYR offer a dip, says Stephen Innes, head of trading for the Asia-Pacific at Oanda Corp.
** Ringgit is expected to defend its defense in the coming weeks and could lose the previous 4.20 / USD by the end of the year, as Malaysia's target of a higher general government deficit is detrimental to the outlook
** Markets are pricing in dismantling Bank Negara Malaysia's policy outlook due to moderate inflation, a slowdown in the economy and the government's fiscal weakness
* The 10-year yield of government bonds has climbed to 4bps to 4.15%
* It is expected that the issuance of gross government bonds in 2019 would amount to approximately EUR 120 billion, and this will be easily absorbed in view of the high market liquidity, CIMB strategists, including Nik Mukharriz, wrote in note
** Accordingly, the yield will be more influenced by the fluctuation of interest rates and other market factors
* Data on foreign exchange reserves for the end of October, at 15.00 local time; without an estimate, the shares fell by 0.2% to 102.8 billion dollars in the two weeks to 15 October