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Ringgit Near One-Week High as Economic Data Support Risk-Taking

Malaysia’s ringgit traded near a one-week high after U.S. and Chinese economic data suggested global growth is picking up, boosting demand for riskier assets.

The net income of Chinese industrial companies rose 7.8 percent in September from a year earlier to 464 billion yuan ($74 billion), the first increase in six months, according to a report released Oct 27 in Beijing. U.S. gross domestic product grew at a 2 percent annual rate in the third quarter, compared with the 1.8 percent gain forecast in a Bloomberg survey, official data showed Oct. 26.

“The U.S. has been a little bit positive in terms of the numbers and Chinese industrial profits showed signs things are improving,” said Choong Yin Pheng, senior manager for fixed income and economic research at Hong Leong Bank Bhd. in Kuala Lumpur. “That’s helping risk appetite.”

The ringgit strengthened 0.3 percent to 3.0488 per dollar as of 9:05 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. It closed at 3.0430 on Oct. 25 and touched 3.0368, the strongest since Oct. 19. The market was shut on Oct. 26 for a public holiday. One-month implied volatility, a measure of exchange-rate swings used to price options, fell 10 basis points to 5.90 percent.

Government bonds advanced Oct 25. The yield on the 3.314 percent notes due October 2017 dropped two basis points, or 0.02 percentage point, to 3.24 percent, according to Bursa Malaysia.

To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net

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

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