Ringgit extends weekly run of gains supported by stabilising oil

[KUALA LUMPUR] The ringgit rose for a third week in the longest stretch since May, helped by a plunge in the dollar on disappointing US data and as stabilising Brent crude brightens the earnings outlook for Malaysia.

Malaysian export numbers on Friday are forecast to show growth held above 8 per cent for a second month in October, the best performance since June last year. While the currency has dropped the most in Asia in 2015 as depressed energy prices cut government revenue for the region's only major net oil exporter, asset sales by debt-ridden state investment company 1Malaysia Development Bhd. have revived sentiment some what.

The currency appreciated 1 per cent from Nov 27 to 4.2175 a dollar as of 10:12 am in Kuala Lumpur, taking its gain in the past three weeks to 3.7 per cent, according to prices from local banks compiled by Bloomberg. A gauge tracking the greenback dropped 1.4 per cent in New York, its biggest loss since March, sending the ringgit to a seven-week high of 4.1915 in early trade on Friday.

"The ringgit is higher because the dollar was weaker due to the weak US manufacturing and non-manufacturing data," said Christopher Wong, a Singapore-based senior currency analyst at Malayan Banking Bhd. "Oil prices, which have seen relative stability above US$40, and the recent news flow on 1MDB, are also supportive." While the best ringgit forecasters see a further decline in the currency next year, they say it won't be as protracted on optimism the worst of the commodities slump is over. While Brent has more than halved from its 2014 peak to around US$44 a barrel, it's been range bound since early November between US$42 and US$48. The Organization of the Petroleum Exporting Countries is meeting later Friday amid speculation they will cut production to support prices.

Malaysia's exports increased 8.4 per cent in October from a year earlier, compared with the previous month's 8.8 per cent pace, according to the median estimate in a Bloomberg survey ahead of the midday report. The trade surplus is expected at 9 billion ringgit from 9.7 billion ringgit.

Five-year government bonds fell this week, with the yield rising 11 basis points to 3.81 per cent, prices from Bursa Malaysia show. That's the biggest weekly increase since late September.

BLOOMBERG