Ringgit near one-year low before Friday budget

(The Edge Markets) – Ringgit trades near the weakest level in a year as investors await Friday’s budget to see how the government will tackle its fiscal deficit.

* USD/MYR little changed at 4.1840 after rising to 4.1850, matching Wednesday’s high which was the strongest since Nov 15

** Support 4.1411, 4.1227, 4.0900; resistance 4.1885, 4.1990, 4.243

* Finance Minister Lim Guan Eng will table the 2019 budget in parliament at 4pm local time on Friday

** Malaysia has run a fiscal shortfall since 1998 and markets are looking to see how the govt will contain it amid a drop in tax revenue

* Budget will probably be “bitter medicine” with the govt unlikely to offer goodies as it seeks to strengthen public sector finances, says Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore

** USD/MYR will probably rise above 4.20 before next week’s Fed decision, in an environment of a stronger dollar, lower oil prices and a subdued Chinese yuan despite Beijing’s promise of more stimulus

* Malaysia’s 10-year bond yield drops 1bp to 4.09%

* Central bank said Wednesday it has commissioned an independent review on a RM2 billion land deal linked to state fund 1MDB

* Manufacturing PMI fell to 49.2 last month from 51.5 in September, Nikkei and IHS Markit said Thursday