Ringgit Approaches One-Week High on U.S. Budget Pact Optimism
Malaysia’s ringgit rose, nearing a one-week high, as signs U.S. policy makers will reach agreement on budget revisions boosted demand for riskier assets.
House Speaker John Boehner said there will be a vote this week on a budget that would raise tax rates on income of more than $1 million a year, an attempt to avert more than $600 billion in automatic spending cuts and tax increases. Standard & Poor’s raised Greece’s credit rating yesterday from selective default to B- with a stable outlook. Malaysian inflation was 1.4 percent in November, compared with 1.3 percent in October, according to a Bloomberg survey before data due today.
“People are getting more optimistic that the U.S. will find a solution to the fiscal cliff issue,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “Greece’s upgrade boosted sentiment.”
The ringgit climbed 0.1 percent to 3.0500 per dollar as of 9:14 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.0460, near the 3.0417 level reached on Dec. 13 that was the strongest since Dec. 6. One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell 11 basis points, or 0.11 percentage point, to 4.19 percent.
Government bonds were steady. The yield on the 3.492 percent notes due March 2020 held at 3.48 percent, according to Bursa Malaysia.
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