Ringgit Heads for Weekly Gain as Growth Outlook Buoys Inflows

Malaysia’s ringgit headed for a weekly advance on speculation investors will add to holdings of local assets after reports showed manufacturing gains in the nation’s biggest export markets.

The currency snapped a three-week losing streak before a report today that may show employment in the U.S. rose for a second month in November. A report late yesterday showed Singapore’s manufacturing expanded last month at the fastest pace in four months. Data earlier this week showed an increase in factory output in China and the U.S. Malaysian government bonds rallied for a fifth week.

“Manufacturing is gaining momentum, which should help reduce fears of a global slowdown,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. “It’s positive for currencies, especially those that are geared toward a risk-on environment.”

The ringgit strengthened 0.5 percent this week to 3.1485 per dollar as of 4:15 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency was little changed from 3.1470 yesterday and has climbed 8.8 percent this year.

U.S. companies added 150,000 jobs in November, according to the median forecast in a Bloomberg News survey of 87 economists before a Labor Department report today. Singapore’s Purchasing Managers’ Index, a manufacturing gauge, rose to 51.4 from 50.7 in October, the highest level since July.

Yields Decrease

China and Singapore, Malaysia’s two largest markets, each accounted for 13 percent of shipments this year through September, according to data published by Malaysia’s trade ministry. The U.S. bought 10 percent of the country’s exports.

Malaysia’s three-year bonds gained, sending yields to the lowest level in eight days. The rate on the 3.21 percent note fell two basis points this week to 3.13 percent, according to Bursa Malaysia. The price increased 0.04, or 40 sen per 1,000 ringgit face amount, to 100.18. A basis point is 0.01 percentage point.

Overseas investors owned 127 billion ringgit ($40.2 billion) of local bills and debt as of end-October, up 83 percent from the end of 2009, according to data published by the central bank on its website. Their stake in government bonds rose 76 percent to a record 71.9 billion ringgit.

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.

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