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Ringgit set for best week since 1998 as oil prices extend gain
[KUALA LUMPUR] The ringgit led gains among global currencies and was poised for its biggest weekly advance since 1998 as surging crude oil prices brightened prospects for Malaysia.
The currency rose 2 per cent to 4.1550 a dollar as of 8:33 am in Kuala Lumpur, taking its gains for the week to 6.3 per cent, according to prices from local banks compiled by Bloomberg. It earlier reached 4.1440, the strongest level since Sept 1.
Asian stocks rose and a gauge of the dollar fell after minutes from the Federal Reserve's latest meeting indicated the central bank won't rush to raise interest rates. Brent crude extended gains after rising 3.4 per cent on Thursday. Malaysia, Asia's only major oil exporter, derives about 22 per cent of state revenue from the commodity.
"The strong rise in the ringgit is on the back of the rally we've seen in oil prices," said Khoon Goh, a senior strategist at Australia & New Zealand Group Ltd in Singapore. "The US dollar was weaker on the back of the Fed minutes, which were read as dovish by the market, and this also helped the move in the ringgit." While Fed officials noted the US economy continued to improve, the committee decided to wait for additional data confirming the outlook for growth, the minutes showed. Officials cited growing risks, mainly from China, while saying they were on track to increase rates this year. Odds of a Fed liftoff in 2015 have fallen below 50 per cent, futures data show, after a weaker-than-expected US jobs report last week.