USD/MYR Tests Sub 50-day EMA Before Stabilizing, BNM Seen On Hold Next Week

USD/MYR sits up off earlier lows, last near 4.7400, down slightly for the session. Earlier (per BBG) we touched 4.7250, which was fresh lows back to early Feb for the pair. This also put us under the 50-day EMA (near 4.7310), although we haven't been able to sustain this break.

• MYR is now up around 0.80% for the week, the best performer in the EM Asia FX space.
• The clear step up in verbal rhetoric around concern for MYR weakness from the PM, BNM Governor and second Vice Finance Minister (who warned that the authorities were prepared to intervene) has been a key factor in the turnaround.
• There is likely to be increased focus on next week's BNM decision, although the firm consensus is for no change in the 3.0% policy rate. A rate hike may be do little to boost MYR against the USD, given a still wide policy wedge with the Fed. Comments or measures to boost MYR from the central bank will still be eyed though.
• Earlier we had the PMI print for Feb, which ticked up to 49.5 (form 49.0), but remained sub the expansion/contraction point. We are above early 2023 lows of 46.5 though.