Ringgit Leads Asia Gains as Jobs Data Temper U.S. Rate-Rise Bets

Malaysia’s ringgit rose, leading gains in Asia, as U.S. jobs data that trailed estimates pushed back the expected timetable for borrowing-cost increases.

The yield on two-year U.S. Treasuries fell four basis points, the most since Jan. 10, on April 4 as a report showed payrolls rose 192,000 in March, less than the 200,000 increase forecast by economists surveyed by Bloomberg. Global funds held 29 percent of Malaysian government bonds excluding bills in February, compared with 16.6 percent of Thai debt, according to central bank data.

“Lower short-term yields in expectation that maybe we’re still some way off from any commencement of interest-rate rises in the U.S. is going to benefit most Asian currencies,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore. The large foreign ownership of local notes increases the Malaysian currency’s sensitivity, he said.

The ringgit rose 0.3 percent, the biggest gain since March 28, to 3.2707 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. That pared its loss over six months to 2.5 percent. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, declined 14 basis points, or 0.14 percentage point, to 6.55 percent.

Federal Reserve Chair Janet Yellen said March 31 the U.S. economy will need stimulus for “some time” and the central bank hasn’t done enough to combat unemployment. That followed her March 19 comments, when she said the central bank’s bond-buying program could end later this year and benchmark interest rates may be raised about six months after that.

Trade Surplus

Malaysian exports rose 12.3 percent in February from a year earlier, exceeding the 10.6 percent gain forecast in a Bloomberg survey, according to an April 4 report. The trade surplus widened to 10.4 billion ringgit ($3.2 billion), the largest since March 2012.

Bank Negara Malaysia’s foreign reserves increased to $130.2 billion as at March 31 from $129.6 billion as at March 14, a report showed today.

The Southeast Asian nation’s overseas shipments will be supported by the relatively weaker ringgit, a recovery in the electronics industry and higher oil and gas production, Australia & New Zealand Banking Group Ltd. economists including Singapore-based Glenn Maguire wrote in an April 4 research note.

The yield on Malaysia’s 3.26 percent sovereign bonds due March 2018 fell one basis point to 3.61 percent, data compiled by Bloomberg show.