Malaysia’s ringgit gained the most since September 2013 after disappointing U.S. data prompted traders to pare rate-increase bets.
The ringgit rose as much as 1.5 percent versus the greenback, leading gains in Asia. It closed up 1.4 percent at 3.6537 in Kuala Lumpur, according to data compiled by Bloomberg. A dollar gauge fell 0.4 percent earlier in a third day off losses before climbing 0.1 percent.
Investors cut wagers on when they see the Federal Reserve tightening monetary policy, including futures dated from September through January, as the Empire Manufacturing Index unexpectedly contracted in April. Brent crude prices advanced for a sixth day, which may help allay concern that government finances will deteriorate in a nation that’s a net oil exporter.
“Now, maybe the consensus for the Fed rate hike is more toward September,” said Sean Yokota, the Singapore-based head of Asian strategy at Skandinaviska Enskilda Banken AB. “It’s a bit of a dollar squeeze.”
Malaysia sold $1.5 billion of 10- and 30-year dollar Islamic bonds Wednesday in its first global sale since 2011 and got orders for more than $9 billion, according to an e-mailed statement from the Ministry of Finance. The debt was issued at yield spreads over U.S. Treasuries that were less than the initial price target.
The Southeast Asian nation could be vulnerable to capital outflows should the U.S. raise rates due to the level of foreign ownership of its debt. Global funds held 30 percent of the securities in March compared with 18 percent for Thailand, central bank data show.
Malaysia’s local-currency sovereign bonds advanced, with the 10-year note yield declining one basis point, or 0.01 percentage point, to 3.89 percent, data compiled by Bloomberg show. The government sold its 10-year sukuk Wednesday at 3.04 percent and the 30-year notes at 4.24 percent.