Ringgit Climbs as U.S., China Data Support Recovery; Bonds Gain

Malaysia’s ringgit advanced for a second day on optimism improving economic data in the U.S. and China will help stem a slowdown in regional exports. Bonds gained.

U.S. reports showed companies in the world’s biggest economy hired more workers in November and manufacturing expanded for a 16th consecutive month, while separate data released yesterday indicated China’s manufacturing picked up in November. The ringgit touched a three-month low before the Chinese figures were published, having retreated in each of the last three weeks as concern Europe’s debt crisis will worsen bolstered demand for dollars.

“The data appear to be reviving risk appetite for Asian stocks and currencies,” said Choong Yin Pheng, manager of economic and fixed-income research at Hong Leong Bank Bhd. in Kuala Lumpur. “While it takes some pressure off the market, sentiment remains fragile because of Europe’s debt crisis.”

The ringgit climbed as much as 0.4 percent to 3.1409 per dollar before trading at 3.1510 as of 4:13 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.1703 yesterday, the weakest level since Aug. 17. The currency is still up 8.7 percent for the year, second only to the Thai baht among Asia’s most-traded currencies excluding the yen.

ADP Employer Services yesterday said U.S. companies added 93,000 jobs last month, the most in three years. The Institute for Supply Management said its factory index was little changed at 56.6 after reaching a five-month high of 56.9 in October. A reading higher than 50 signals growth. China’s manufacturing grew at a faster rate in November for a fourth straight month, the logistics federation reported yesterday.

The U.S. bought 10 percent of Malaysian exports this year through September, according to the Southeast Asian nation’s trade ministry. China and Singapore, the nation’s two largest markets, each accounted for 13 percent of shipments.

Bonds Gain

Three-year notes rose for a second day after the central bank said local interest rates are appropriate to support economic growth.

The yield on the 3.21 percent note fell two basis points to 3.13 percent, according to Bursa Malaysia. The price increased 0.06, or 60 sen per 1,000 ringgit face amount, to 100.2. A basis point is 0.01 percentage point.

“Our interest rates are at appropriate levels at this point in time, given the outlook for inflation and the outlook for growth,” Governor Zeti Akhtar Aziz told reporters in Kuala Lumpur today.

Bank Negara Malaysia on Nov. 12 kept its overnight policy rate at 2.75 percent. Policy makers next meet on Jan. 27 in the first of six meetings scheduled for 2011.

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