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Ringgit leads gains in Asian currencies as oil boosts sentiment
[KUALA LUMPUR] Malaysia's ringgit led gains in Asian currencies as an increase in oil boosted growth prospects for the region's only major net crude exporter.
The ringgit climbed to the strongest in a week as brent crude jumped more than 2 per cent, halting a three-day decline and improving the outlook for an economy that derives about a fifth of its revenue from energy-related sources. The ringgit slumped 1 per cent last month, Asia's worst performer.
"The ringgit was oversold in July," said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd in Singapore.
"Crude oil prices also opened firmer this morning, so that helped boost ringgit at the start of trading." Malaysia's currency gained 0.8 per cent to 4.0395 per dollar as of 9:35 am in Kuala Lumpur after appreciating to 4.0305, the strongest level since July 21, according to prices from local banks compiled by Bloomberg.
Malaysia's currency also benefited after the dollar fell on Friday when disappointing US economic growth figures caused traders to push back bets for when the Federal Reserve will raise interest rates.
There's a 36 per cent chance of a increase this year, down from 45 per cent odds a week earlier, according to data compiled by Bloomberg based on futures.
Malaysian bonds rose, with the five-year yield dropping one basis point to 3.21 per cent, and the 10-year falling four basis points to 3.59 per cent, according to prices compiled by Bloomberg.