Ringgit touches 3 week low before erasing loss

The potential for future exchange rate fluctuations for the ringgit was of concern for businesses in Malaysia

KUALA LUMPUR: Ringgit touches a three-week low before erasing losses as most regional currencies stabilise after U.S. officials eased concern about an imminent attack against North Korea.

* USD/MYR little changed at 4.2885 after reaching 4.2902, highest since July 21.

* Support 4.2760, 4.2663, 4.2505; resistance 4.3022, 4.3055, 4.3217

"Caution prevails in USD/Asia FX following Wednesday’s slide although “the apex of the ‘fire and fury’ dent on risk sentiment is perhaps behind us,” says Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.

* BNM’s warning against ringgit derivatives in Singapore may hurt MYR on days when there’s poor global risk sentiment

* BNM said late Wednesday ringgit futures traded on exchanges in Singapore are against its FX policies and appropriate action will be taken against anyone who flouts the law

* 10-year govt bond yield rises 1bp to 3.99% 

* Industrial production +3% June y/y vs 4.6% May: Bloomberg survey before data due at noon local time

ING’s forecast for factory output is in line with market consensus, with expectations of slower growth fueled by sharp slowdown in trade data, co.’s Asia economist Prakash Sakpal writes in note.

BNM probably assesses economic risks as almost balanced between growth and inflation and will keep monetary policy on hold through 2018. - Bloomberg