MYR Firms Up After BNM Holds Fire

Spot USD/MYR has shed 65 pips and last changes hands at MYR4.1570, as the greenback has weakened amid an uptick in e-minis. Eyes are on Malaysian economic data, with industrial output and manufacturing sales due at the top of the hour.

• BNM left its main policy rate unchanged on Thursday, which may have provided some support to the ringgit, given that analysts had been almost evenly split in their forecasts. 12 out of 21 economists surveyed by BBG expected policymakers to stand pat, while 9 looked for a 25bp cut. With yesterday's decision, BNM snapped a series of four consecutive meetings during which it trimmed the key interest rate.
• As the rate has turned to the downside, technical focus moves to Sep 3 multi-month low of MYR4.1343. A dip through that level would bring Feb 12 low of MYR4.1285 into play. Bulls need a push through Sep 9 high of MYR4.1757 before targeting Aug 24 high of MYR4.1840.