Ringgit drops to three-month low as US jobs take centre stage

[KUALA LUMPUR] The ringgit fell to a three-month low against the dollar on speculation US jobs data due on Friday will underscore the prospects for a Federal Reserve interest-rate increase that would damp demand for emerging-market assets.

The currency dropped for a fourth day even as Brent crude reached US$50 a barrel overnight for the second time this week, which if sustained would boost prospects for the oil exporter's finances.

Fed Chair Janet Yellen said last Friday that ongoing improvement in the US economy would back the case for higher rates "in the coming months." The ringgit retreated 0.5 per cent to 4.1672 per dollar as of 11.18am in Kuala Lumpur, according to prices from local banks compiled by Bloomberg.

The currency has lost 2.1 per cent in the past four days, paring its gain this year to 3 per cent.

US employers created 160,000 jobs for a second month in May, according to the median estimate in a Bloomberg survey before Friday's payrolls report.

Malaysia's 10-year government bond yield was steady at 3.94 per cent. That compares with 1.82 per cent for similar-maturity US Treasuries.

BLOOMBERG