[KUALA LUMPUR] Malaysia's ringgit rallied from the lowest level in more than a week on signs risk appetite is improving as emerging-market equities rebounded and demand for the relative safety of the yen dwindled.
The ringgit halted a two-day loss as the Chinese yuan gained the most since a dollar peg was scrapped in 2005 on the first trading day following the week-long Lunar New Year holidays. The Southeast Asian nation's benchmark share index climbed on speculation a selloff that pushed global equities into a bear market last week was overdone.
"There's some risk-on right now," said Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd in Singapore. "The stronger yuan should benefit exporters who export to China."
The ringgit strengthened 1 per cent to 4.1298 a dollar in Kuala Lumpur, after retreating 0.1 per cent last week, according to prices from local banks compiled by Bloomberg. The FTSE Bursa Malaysia KLCI Index advanced 0.4 per cent.
It remains to be seen if gains in the ringgit and stocks can be sustained as Brent crude resumed its decline after surging 11 per cent on Friday in New York. Malaysia's currency was Asia's worst performer last year as a slump in the commodity cut government revenue for the oil exporter.
Data on Thursday may show economic growth slowed to 4.1 per cent last quarter from a year earlier, compared with 4.7 per cent in the previous three months, according to the median estimate in a Bloomberg survey. The economy is seen cooling to 4.9 per cent for the full-year from 6 per cent.
Government bonds were little changed, with the five-year yield at 3.39 per cent and the 10-year yield at 3.92 per cent, prices from Bursa Malaysia show.