Ringgit gains most in three weeks

Malaysia’s ringgit climbed the most in almost three weeks before reports forecast to show the nation’s economic growth accelerated and the current-account surplus widened. Government bonds were little changed.   At 9am, the ringgit appreciated against the greenback to 3.1935/1965 from 3.2040/2070 yesterday.

A dealer said the euro was dampened by the weak eurozone data while the Japanese yen slipped after the Finance Minister Taro Aso told a parliamentary committee that Japan must retain the currency intervention as a policy tool.

Against other major currencies, the ringgit was also traded higher. The local note appreciated against the Singapore dollar to 2.5616/5644 from 2.5683/5712 yesterday and strengthened against the yen to 3.1868/1901 from 3.2255/2102 on Thursday.

Against the British pound, the ringgit emerged stronger to 5.1288/1349 from 5.1360/1424 yesterday and rose to 4.2962/3009 from 4.3107/3157 against the euro.-- Bernama

Gross domestic product increased 4.7 per cent in the third quarter from 4.3 per cent in the previous three months, according to the median estimate of 17 economists surveyed by Bloomberg News before official data due at 6pm local time. The ringgit rose for a second day after Federal Reserve chairman nominee Janet Yellen said yesterday she would maintain the record stimulus that has stoked global asset gains and suppressed borrowing costs until the US economy is stronger.

"Risk appetite for Asian currencies is improving because Yellen’s statement sends a strong signal that tapering will be on the back burner for a while," said Yeah Kim Leng, chief economist at RAM Holdings Bhd in Kuala Lumpur. "The ringgit’s strength will be further supported by the improvement in domestic economic data."

The currency appreciated 0.3 per cent to 3.1951 per dollar as of 9.14am in Kuala Lumpur, the steepest increase since October 28, according to data compiled by Bloomberg.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell two basis points, or 0.02 percentage point, to 8.73 per cent. The gauge declined 31 basis points this week.

Malaysia’s current-account surplus widened to RM10.7 billion in the third quarter from RM2.6 billion in the preceding three months, according to the median forecast of analysts polled by Bloomberg News before data due at 6pm local time today.

The yield on the 3.48 per cent bonds due March 2023 was little changed at 3.89 per cent, according to data compiled by Bloomberg. The rate rose 17 basis points this week.-- Bloomberg

Source: Business Times 15-11-2013