Ringgit Nears 11-Week High as Data Signal U.S. Economy Improving

Jan. 7 (Bloomberg) -- Malaysia’s ringgit rose, approaching an 11-week high, as data suggesting an improvement in the U.S. economy spurred demand for emerging-market assets. Government bonds advanced.

The currency gained for the first time in three days after reports on Jan. 4 showed U.S. nonfarm payrolls rose by more-than-estimated in December, while service industries expanded at the fastest pace in 10 months. Malaysian exports probably increased 2 percent in November, after declining 3.2 percent in October, according to a Bloomberg News survey before figures due Jan. 9.

“The nonfarm payroll numbers were quite positive,” said Saktiandi Supaat, the head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “The services numbers were a bit of a surprise so there was a twin effect.”

The ringgit climbed 0.3 percent to 3.0436 per dollar as of 4:09 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.0385 earlier, near the 3.0296 level reached on Jan. 3, which was the strongest since Oct. 18. One-month implied volatility, a measure of expected moves in exchange rates used to price options, rose 16 basis points to 5.32 percent.

The yield on the 3.314 percent government notes due October 2017 declined one basis point, or 0.01 percentage point, to 3.22 percent, according to Bursa Malaysia.

The government sold 3.5 billion ringgit ($1.2 billion) of Shariah-compliant debt due in 2020 today at 3.489 percent, according to data published on the central bank’s website. Demand for the securities exceeded the amount on offer by 2.35 times.

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.