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Risk Aversion Triggers Ringgit Sales, USD/MYR Lodges Fresh Cycle Highs

MYR

Spot USD/MYR has turned bid in early trade as the combination of China's worrying COVID-19 situation and a delayed reaction to U.S. expectation-beating CPI numbers released Friday is creating a drag on risk assets. The pair has taken out resistance from a recent cycle high (MYR4.4085) and last deals at MYR4.4125, up 105 pips on the day.

  • The upswing turns topside technical focus to MYR4.4490, which limited gains on Mar 23, 2020, soon after COVID-19 was deemed a global pandemic. Conversely, bears need a return below May 31 low of MYR4.3643 to get some reprieve.
  • Domestic palm oil inventories shrank 7.4% M/M in May, Malaysian Palm Oil Board said on Friday, as tight conditions in global markets and export controls implemented by top producer Indonesia underpinned demand for Malaysian CPO. The nation shipped 27% more of the edible oil than in April, which marked the largest monthly rise in exports since September. Palm oil futures traded in Kuala Lumpur retreated to weakest levels since Apr 25.
  • Malaysia's trade figures will be published on Friday.

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