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Ringgit Completes Best Week Since September on Recovery Signals

Malaysia’s ringgit completed its best weekly gain in four months after government reports showed factory production and exports improved and China’s economic recovery gained traction.

The currency touched a 10-month high today amid signs fund inflows into emerging-market assets are accelerating. China said yesterday imports jumped 6 percent in December, brightening the outlook for Malaysian exporters. Industrial output in Southeast Asia’s third-largest economy rose 7.5 percent in November from a year earlier, while overseas shipments grew 3.3 percent, both beating economists’ estimates.

“China trade numbers are fueling optimism global growth is picking up,” said Roy Teo, a currency strategist in Singapore at ABN Amro Bank NV. “There is new optimism and new money coming into financial markets. Risk-on may persist till the end of the month.”

The ringgit rallied 1 percent to 3.0228 per dollar in Kuala Lumpur from a week ago as of 4:05 p.m. in Kuala Lumpur, according to data compiled by Bloomberg, the most since the five days ended Sept. 14. The currency gained 0.1 percent today and touched 3.0160, a level last seen on March 12, 2012. One-month implied volatility, a measure of expected moves in exchange rates used to price options, was at 5.02 percent versus 5.16 percent on Jan. 4.

Emerging-market bond funds attracted $2.04 billion of inflows in the seven days to Jan. 9, the second-best weekly intake on record, Morgan Stanley said in a Jan. 10 report, citing data compiled by EPFR Global. Equity funds had a record week, with $7.4 billion of inflows.

The yield on Malaysia’s 3.314 percent sovereign notes due October 2017 was little changed from a week ago, according to Bursa Malaysia. It fell three basis points, or 0.03 percentage point, to 3.24 percent today.

The finance ministry will sell 4.5 billion ringgit ($1.5 billion) of three-year bonds on Jan. 14. It raised 3.5 billion ringgit from an offering of seven-year Islamic debt on Jan. 7, the first of 30 auctions scheduled for 2013.

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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