You are here

South Korean won jumps with Malaysian ringgit as Fed holds fire

30119624 - 03_12_2013 - FOREX4.jpg
South Korea's won surged the most in three months and Malaysia's ringgit rose after the Federal Reserve kept interest rates on hold and pared forecasts for future increases.

[KUALA LUMPUR] South Korea's won surged the most in three months and Malaysia's ringgit rose after the Federal Reserve kept interest rates on hold and pared forecasts for future increases.

Fed Chair Janet Yellen said the case for tightening in 2016 remains if the job market continues to improve. While the market-implied odds of a hike by December rose to 61 per cent from 58 per cent, policy makers scaled back the number of rate increases they expect next year to two from three. An overnight jump in Brent crude also supported demand for emerging-market assets.

"Despite hardening on prospects for a 2016 hike, the downward revision of the 'Dot Plot' by the Fed was what caught the attention and sent the greenback sliding," said Vishnu Varathan, an economist with Mizuho Bank Ltd in Singapore.

"The ringgit should outperform on firmer oil."

The won jumped 1.8 per cent to 1,100.95 per US dollar as of 9:36am in Seoul, according to prices from local banks compiled by Bloomberg. It reached 1,100.55, the strongest since Sept 9. The ringgit climbed 0.9 per cent to 4.1005 per US dollar, the biggest gain since Aug 10.

BLOOMBERG