Ringgit Gains On Dollar Retreat, Firmer Palm Oil

Spot USD/MYR falters on the back of overnight greenback sales in reaction to the FOMC's monetary policy decision well documented in our earlier bullets. The rate last operates at MYR4.4497, down 85 pips on the day.

• Bears look for a break below the 50-DMA, which intersects at MYR4.4136. On the flip side, bulls look for a breach of yesterday's high of MYR4.4625 before targeting Jan 4, 2017 high of MYR4.5002.
• Palm oil futures extended gains in after-hours trade, with the most active contract traded in Kuala Lumpur finishing the day MYR45.00/MT higher. Gains were boosted by a firm showing from soybean oil, which was underpinned by concerns about the weather outlook in some regions across the U.S. As palm oil appears to be finding a base after a dramatic retreat from its April peak, it is worth keeping in mind that Indonesia's attempts to turbocharge its shipments are reducing Malaysia's market share. Latest cargo surveyor data showed that Malaysia's palm oil exports declined 2.2%-11.3% M/M in the first 25 days of this month.
• Malaysia's Prime Minister Ismail Sabri ruled out extending his stability pact with the opposition, which theoretically opens the door to calling a snap election at any point after July 31. But the Premier signalled that his administration still wants to table some new legislative projects this parliamentary term, which suggests he may not be willing to rush with dissolving the legislature.