The ringgit led an advance in Asian currencies as odds of a US interest-rate increase this year diminished further, giving a reprieve to emerging-market assets.
Asian currencies are rallying in October as futures show just a 33% chance of a rate hike by the Federal Reserve, compared with 61% at the start of the month.
Exchange rates in the region have come under pressure this year as prospects for US monetary tightening fuelled concern that demand for local assets would recede.
The ringgit has seen the biggest selloff as a slump in Brent crude cuts earnings for the oil exporter and a political scandal involving the prime minister erodes investor confidence.
“The Fed rate hike is being pushed out into next year in light of some dissenting voices from the Fed board and also the weak data,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd.
“I’m wary about the ringgit’s strength. The domestic political headlines could from time to time be a driver for the ringgit.”
The currency appreciated 1.4% to 4.1250 a dollar as of 8.54am in Kuala Lumpur as trading resumed following a holiday on Wednesday, prices from local banks compiled by Bloomberg show. While the ringgit has rallied 6.4% in October in Asia’s best performance after Indonesia’s rupiah, it is still down 14 percent this year.
Fed governor Daniel Tarullo told the CNBC television channel that he doesn’t currently favor raising interest rates in 2015, after fellow governor Lael Brainard made the case this week for patience.
Data on Wednesday showed US retail sales rose 0.1% in September from a month earlier, below the median estimate of economists in a Bloomberg survey for a 0.2% gain. The August number was revised down to zero. – Bloomberg, October 15, 2015.
No comments:
Post a Comment