You are here
Malaysian ringgit defies drop in Asian currencies on oil's rally
[KUALA LUMPUR] Malaysia's ringgit strengthened, bucking a decline in Asian currencies, as an overnight rally in energy prices offset the prospect of a US interest-rate increase as soon as next month.
Brent crude surged to a six-week high on Monday, providing some reprieve to the ringgit after its biggest monthly drop since May last month. Malaysia is the only net exporter of oil among Asia's major economies and derives about a fifth of government revenue from energy-related sources.
A gauge of the dollar strengthened for a second day and Treasuries fell after a report showed US manufacturing expanded in September, backing the case for the Federal Reserve to raise rates.
"Dollar strength and supported US Treasury yields off the back of better-than-expected US data are reminding markets that November remains a live meeting," said Christopher Wong, a foreign-exchange strategist at Malayan Banking in Singapore.
"Oil price gains are supporting the ringgit." The ringgit climbed 0.3 per cent to 4.1240 per dollar as of 9.17am in Kuala Lumpur, according to prices from local banks compiled by Bloomberg, as Malaysian financial markets resumed trading after a holiday on Monday.
The won fell 0.2 per cent to 1,103.95, headed for a third session of losses. Local markets were also closed for a holiday Monday.
A report on Tuesday showed South Korea's current-account surplus narrowed to US$5.51 billion in August, the smallest since April, from a revised US$8.67 billion the previous month.
South Korea's 10-year government bonds fell for the first time in eight days, pushing the yield up five basis points to 1.45 per cent, according to prices from local banks compiled by Bloomberg.