Ringgit Gains Most in a Month as U.S. Stimulus Concerns Recede

The ringgit climbed the most in a month before U.S. data that will provide clues on whether the Federal Reserve will reduce asset purchases that have fueled fund flows to emerging markets.

The currency gained 0.3 percent, the most since May 8, to 3.0830 per dollar as of 3:08 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The ringgit fell 2 percent last week, the biggest drop since February.

The ADP Research Institute in New Jersey will release May employment numbers today, while a Labor Department report on nonfarm payrolls is due June 7. Fed officials are committed to record stimulus, Federal Reserve Bank of Atlanta President Dennis Lockhart said June 3. Malaysian exports rose in April after a contraction in March, according to a Bloomberg survey before data due June 7.

“We’re seeing some position adjustment ahead of the ADP report and non-farm payrolls,” said Khoon Goh, a senior strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “I think the market just got too long U.S. dollars and we’re seeing some of that pared back.”

Malaysian exports grew 0.4 percent in April after falling 2.9 percent in March, according to the median estimate of economists in a Bloomberg survey before data due June 7. The U.S. Institute for Supply Management’s factory index fell to 49 in May, a report showed June 3.

One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell 18 basis points, or 0.18 percentage point, to 7.48 percent.

The yield on the 3.26 percent notes due March 2018 dropped three basis points to 3.23 percent, according to data compiled by Bloomberg.

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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