KUALA LUMPUR, June 3 — Malaysia’s ringgit snapped a seven-day loss after disappointing US factory data fuelled speculation the Federal Reserve will delay increasing interest rates.
An overnight rally in Brent crude also bolstered demand for the ringgit, which is susceptible to commodity price moves because the nation is a net oil exporter. A report on Friday may show its overseas shipments contracted in April for a third month this year. The ringgit is leading declines among Asia’s emerging-market currencies in the past month on bets higher US rates will damp demand for assets in developing countries.
“Weak US factory orders are supporting the ringgit,” said Masashi Murata, vice president at Brown Brothers Harriman & Co. in Tokyo. “The rise in oil in the New York session also supports the ringgit.”
The currency rose 0.7 per cent to 3.6730 a dollar as of 9.45am in Kuala Lumpur, data compiled by Bloomberg show, the biggest gain in a month. It dropped 3.1 per cent in the last seven days and has fallen 2.8 per cent in the past month. Brent crude climbed 0.9 per cent yesterday.
Malaysia’s exports fell 6.7 per cent in April from a year earlier after gaining 2.3 per cent the previous month, according to the median estimate of economists in a Bloomberg survey. The trade surplus probably narrowed to RM4.5 billion, the least since October.
The nation’s government bonds were little changed, with the 10-year yield at 3.93 per cent.
Factory orders in the world’s largest economy dropped 0.4 per cent in April, missing the median estimate for a 0.1 per cent decline, a report showed yesterday. That compares with a March increase of 2.2 per cent. Investors will focus on a jobs report Friday for a clearer idea of when the Fed will tighten policy.
Fed Governor Lael Brainard said the stronger dollar is hurting growth and may push back the timetable for an interest- rate increase. — Bloomberg
