Malaysia’s ringgit rose for a sixth day, the longest run of gains since April, on speculation the Federal Reserve won’t accelerate the reduction of its unprecedented stimulus after employment growth slowed.
American employers hired 74,000 workers in December, the weakest growth since January 2011, indicating a pause in the recent strength of the labor market, according to data released by the Labor Department. The ringgit had its best five-day gain since October last week after official reports showed Malaysia’s exports and factory output topped estimates.
“The stronger ringgit and other Asian currencies are largely driven by the weak U.S. payrolls data,” said Nizam Idris, head of strategy for fixed income and currencies at Macquarie Bank Ltd. in Singapore. “I’m still positive on the dollar in the longer term.”
The ringgit strengthened 0.2 percent to 3.2640 per dollar as of 4:59 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency touched 3.2504, the highest since Dec. 18, and has gained 0.4 percent this month.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 7 basis points, or 0.07 percentage point, to 6.94 percent today.
Fed officials said in December that they will cut monthly bond buying from January to $75 billion from $85 billion. The U.S. central bank will reduce asset purchases by $10 billion at successive meetings this year before ending the program, according to the median forecasts of 42 economists in a Bloomberg survey conducted Jan. 10. The authority will announce its next policy decision on Jan. 30.
Malaysia’s overseas shipments expanded 10.3 percent in November, beating the 6.7 percent median forecast in a Bloomberg survey, while industrial production increased 4.4 percent in the same month, topping the median 2.9 percent forecast in another survey, official data showed last week.
The yield on Malaysia’s 3.26 percent sovereign notes due March 2018 declined three basis points to 3.56 percent, according to data compiled by Bloomberg.