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Ringgit falls toward weakest in three months after oil declines

Wednesday, September 28, 2016 - 11:00

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Malaysia's ringgit approached a three-month low against the US dollar after a decline in crude oil damped the outlook for the energy exporting economy.

[SEOUL] Malaysia's ringgit approached a three-month low against the US dollar after a decline in crude oil damped the outlook for the energy exporting economy.

The ringgit fell the most among emerging-market currencies after Brent crude slid almost 3 per cent Tuesday before major producers meet in Algiers to discuss limiting output.

Emerging-market currencies rose Tuesday as investors judged Hillary Clinton won the first US presidential debate, reducing the likelihood a Donald Trump election victory will roil financial markets.

The US and China are among nations publishing manufacturing data in the coming week based on purchasing managers' indexes.

"The ringgit is weaker on the back of lower oil prices," said Khoon Goh, head of regional research at Australia & New Zealand Banking Group Ltd in Singapore.

"With the first US presidential debate out of the way, the focus turns to the various PMI data due at the turn of the month, and next week's US payrolls number."

The ringgit declined 0.3 per cent to 4.1385 per US dollar as of 10:05am in Hong Kong after depreciating to 4.1605 on Sept 21, the weakest level since June 27.

Meanwhile, the South Korean won gained 0.2 per cent to 1,095.75 per US dollar.

The won has strengthened 6.9 per cent in the past three months, the best performer behind the South African rand of 24 developing-nation currencies tracked by Bloomberg.

"The won's level has become burdensome and vigilance about possible intervention has risen," Ha Keon Hyeong, an economist at Shinhan Investment Corp in Seoul, wrote in a report. The currency is likely to trade in range of 1,094 to 1,102, he said.

South Korean government bonds rose, with the 10-year yield dropping four basis points to 1.46 per cent. Malaysian five-year bond yields were little changed at 3.24 per cent.

BLOOMBERG

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