Malaysia’s ringgit rose, leading gains in Asia, after weak U.S. jobs data supported the case for the Federal Reserve to hold off from raising interest rates.
Employers in the U.S. added 126,000 workers in March, the fewest since December 2013, according to an April 3 report that also showed downward revisions to previous months’ figures. The data spurred declines in the Bloomberg Dollar Spot Index and 10-year U.S. Treasury yields. Foreign funds hold 29 percent of Malaysian sovereign debt, compared with 18 percent of Thai notes, making the nation vulnerable to increases in U.S. rates that reduce the appeal of emerging-market assets.
“Naturally, most think it is hard for the Fed to start to hike in June with the weak first-quarter employment data,” said Masashi Murata, a currency strategist at Brown Brothers Harriman & Co. in Tokyo. “U.S. yields will likely be softer and limit dollar buying.”
The ringgit strengthened 1 percent to 3.6315 a dollar in Kuala Lumpur, according to data compiled by Bloomberg. It reached a one-month high of 3.6212 earlier and has weakened 3.7 percent this year. Brent crude rose 2.7 percent to $56.44 a barrel in Asia Monday, lending support to the ringgit as Malaysia is a net oil exporter.
U.S. interest-rate futures show a 55 percent chance the Fed will raise rates by mid-year, compared with 63 percent two weeks ago.
Malaysian government bonds rose, pushing the yield on the notes due September 2025 down two basis points, or 0.02 percentage point, to 3.84 percent, data compiled by Bloomberg show.