• Dollar flattens on Christmas Eve

• MYR to fluctuate in the range of 4.1925 and 4.2050 against US dollar

Global Highlights

The dollar index wrapped up the week flat but still recorded weekly losses. It remained unchanged at 96.019 on Christmas Eve. The upward drive for dollar came from the surging inflation and a hawkish Fed. Omicron fears weighed albeit limited as early studies showed that the new variant carries a lower risk of hospitalization. On the other hand, the rebound from riskier currencies managed to push down the dollar.

Equities were flat as well as the Dow Jones stayed at 35,951 while the S&P 500 was at 4,726. The UST 10-year benchmark yield was unchanged at 1.493%. Gold gained 0.47% to US$1,817/oz.

The euro fell 0.07% to 1.132, while the British pound edged lower by 0.16% to 1.339.

The Japanese yen appreciated slightly by 0.01% to 114.38 following Japan's Cabinet approval on Friday on its annual budget of more than US$940 billion prioritising the response to battling Covid-19 and the prime minister's aim of growth and wealth distribution. On the data front, Japan's consumer prices rose 0.6% y/y in November, the most in nearly two years and compared with a 0.1% advancement a month earlier.

The Chinese Yuan Strengthened by 0.04% to 6.368.

Crude oil was mixed. Brent declined 0.92% to US$76 per barrel and the WTI remained stable at US$74 per barrel.

Malaysia Highlights:

The ringgit ended the week on stronger footing as it appreciated by 0.10% to 4.196, and was traded with high of 4.2013 and low of 4.1925.

The FBM KLCI stabilized as it closed at 1,516, driven by net selling from the foreign investors of RM6.4mil, offset by net buying from local institutions and retailers.

The local bond market remained tepid. The benchmark MGS yields were mixed as the 3-year was +1.0bps to 2.850%, and 7- year +0.5bps to 3.410%, but the 5-year and 10-years remained flat at 3.170% and 3.560%, respectively.

The IRS yields were mostly higher; the (3Y) +1.5bps to 2.750%, and (10Y) +0.5bps to 3.380%, but the (5Y) and (7Y) unchanged at 2.950% and 3.195%, respectively. KLIBOR was flat at 2.050%.

Against major currencies, the ringgit appreciated vs. the GBP by 0.08% to 5.620, vs. AUD by 0.08% to 3.039, vs. JPY by 0.02% to 3.669, and vs. CNY 0.07% to 1.518, but depreciated vs. EUR by 0.07% to 4.758. Against regional currencies, the ringgit was mixed as well as it strengthened vs. PHP by 0.20% to 11.930, but weakened vs. SGD by 0.05% to 3.090, vs. THB by 0.10% to 7.968, vs. IDR by 0.16% to 3,384, and vs. VND by 0.03% to 5,463.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1900 and 4.1925 while our resistance is pinned at 4.2050 and 4.2090.

Source: AmInvest Research - 27 Dec 2021