Ringgit Goes Offered Despite Tuesday's Upswing In Palm Oil

Spot USD/MYR remains on upward trajectory, last trading +55 pips at MYR4.7417, drawing support from overnight greenback strength. The rate refreshed 24-year highs, which shifts bullish focus to the all-time peak of MYR4.8850. Bears need a pullback past Oct 27 low of MYR4.7028 to get some initial reprieve.

• Palm oil futures firmed Tuesday, extending gains in after-hours trade, which saw resistance from the 100-DMA give way. It remains to be seen if this technical development holds when trading resumes in Kuala Lumpur today. The tropical oil was supported by Indonesia's decision to raise CPO reference price by ~8% for the first half of the month, which will make Malaysian crude more attractive. Worries about the supply of sunflower oil amid heightened Black Sea tensions are also supportive for alternative edible oils. Watchers now set their sights on a palm oil conference in Indonesia this week.
• Bank Negara Malaysia will announce its monetary policy decision this Thursday (our preview is forthcoming). The consensus view is that policymakers will raise the Overnight Policy Rate by another 25bp, but a couple of dissenters have forecast an intermittent pause in the tightening cycle.
• Bernama reported that Malaysia could tweak Budget 2023 depending on the economic situation. The spending plan will need to be tabled in parliament again after PM Ismail Sabri dissolved the legislature for a snap election.