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Ringgit heads for longest losing streak since November pre-FOMC
[KUALA LUMPUR] Malaysia's ringgit declined for a sixth day in its longest stretch of losses since November on speculation the Federal Reserve will prepare markets for an interest-rate increase at this week's meeting.
A gauge of the dollar strengthened the most in two months last week after better-than-expected US retail sales and housing data boosted bets that the Federal Open Market Committee will tighten policy.
While the odds of that happening by December have risen from what they were at the start of the month, futures show a greater likelihood of an increase in the first quarter.
Ongoing probes by US and Singapore authorities into the funds of troubled state investment company 1Malaysia Development Bhd also weighed on the ringgit, according to Commonwealth Bank of Australia.
The currency posted its biggest five-day loss since September last week as the 1MDB woes added to a drop in sentiment as oil prices declined.
"The Fed's going to be hawkish," said Andy Ji, a Singapore-based foreign-exchange strategist at Commonwealth Bank.
"They're going to shift market pricing somewhat in this meeting."
The latest report on 1MDB "was an unexpected escalation in that development," he said.
The ringgit fell 0.6 per cent to 4.0830 per dollar as of 9:11 am in Kuala Lumpur, prices from local banks compiled by Bloomberg show. It earlier reached 4.0920, the weakest level since June 28, after sliding 2.7 per cent last week.