Malaysia’s ringgit completed its best weekly gain in four months after government reports showed factory production and exports improved and China’s economic recovery gained traction.
The currency touched a 10-month high today amid signs fund inflows into emerging-market assets are accelerating. China said yesterday imports jumped 6 percent in December, brightening the outlook for Malaysian exporters. Industrial output in Southeast Asia’s third-largest economy rose 7.5 percent in November from a year earlier, while overseas shipments grew 3.3 percent, both beating economists’ estimates.
“China trade numbers are fueling optimism global growth is picking up,” said Roy Teo, a currency strategist in Singapore at ABN Amro Bank NV. “There is new optimism and new money coming into financial markets. Risk-on may persist till the end of the month.”
The ringgit rallied 1 percent to 3.0228 per dollar in Kuala Lumpur from a week ago as of 4:05 p.m. in Kuala Lumpur, according to data compiled by Bloomberg, the most since the five days ended Sept. 14. The currency gained 0.1 percent today and touched 3.0160, a level last seen on March 12, 2012. One-month implied volatility, a measure of expected moves in exchange rates used to price options, was at 5.02 percent versus 5.16 percent on Jan. 4.
Emerging-market bond funds attracted $2.04 billion of inflows in the seven days to Jan. 9, the second-best weekly intake on record, Morgan Stanley said in a Jan. 10 report, citing data compiled by EPFR Global. Equity funds had a record week, with $7.4 billion of inflows.
The yield on Malaysia’s 3.314 percent sovereign notes due October 2017 was little changed from a week ago, according to Bursa Malaysia. It fell three basis points, or 0.03 percentage point, to 3.24 percent today.
The finance ministry will sell 4.5 billion ringgit ($1.5 billion) of three-year bonds on Jan. 14. It raised 3.5 billion ringgit from an offering of seven-year Islamic debt on Jan. 7, the first of 30 auctions scheduled for 2013.