Malaysia’s ringgit rose for the first time in three days as speculation the Federal Reserve will maintain monetary stimulus at a policy meeting today spurred demand for emerging-market assets. Government bonds advanced.
The MSCI Asia Pacific Index (MXAP) of shares climbed for a second day after U.S. stocks extended their best start to a year since 1989, buoyed by earnings reports from companies including Pfizer Inc. The Fed’s latest round of bond buying is forecast to reach $1.14 trillion before it ends the program in the first quarter of 2014, according to the median estimate in a Bloomberg survey. Malaysia’s central bank will keep the benchmark overnight policy rate at 3 percent at a review tomorrow, all 22 economists in a Bloomberg survey forecast.
“Market sentiment is better today and U.S. earnings were strong,” said Nizam Idris, head of Asian fixed-income and foreign-exchange strategy at Macquarie Bank Ltd. in Singapore. “The Federal Open Market Committee is likely to say they will maintain the current program.”
The ringgit advanced 0.1 percent to 3.0785 per dollar as of 4:19 p.m. in Kuala Lumpur, trimming this month’s loss to 0.7 percent, according to data compiled by Bloomberg. Malaysian financial markets were shut Jan. 24 and Jan. 28 for holidays. One-month implied volatility, a measure of expected moves in exchange rates used to price options, held at 6.22 percent.
The yield on the 3.314 percent sovereign notes due October 2017 dropped two basis points, or 0.02 percentage point, to 3.21 percent, according to Bursa Malaysia.
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