Ringgit gains most in six weeks on China trade, U.S. jobs data

by **Cals** Mon 09 Dec 2013, 13:34

Business & Markets 2013

Written by Bloomberg

Monday, 09 December 2013 12:14

09 Dec 2013 10:30

(Dec. 9): Malaysia’s ringgit strengthened by the most in six weeks after China, the nation’s second-largest export market, reported its biggest trade surplus in almost five years. Government bonds fell.

The currency halted a four-day decline as China’s surplus grew to $33.8 billion in November from a year earlier, the highest since January 2009, according to customs data released yesterday. A U.S. Labor Department report last week showed companies added 203,000 jobs to payrolls last month, more than the 185,000 increase predicted by economists in a Bloomberg survey and up from a revised 200,000 in October.

“The China trade numbers were better than expected so that could have played a part,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “Some were expecting even stronger payrolls data, so when it came out, the players were closing their positions.”

The ringgit appreciated 0.5 percent to 3.2170 per dollar as of 10:22 a.m. in Kuala Lumpur, the biggest gain since Oct. 28, according to data compiled by Bloomberg. The currency dropped 5 percent this year on prospects the Federal Reserve will trim stimulus that’s spurred demand for emerging-market assets.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 17 basis points, or 0.17 percentage point, to 7.98 percent.

The yield on the 3.172 percent sovereign notes due July 2016 rose one basis point to 3.28 percent, the highest level since Oct. 14, data compiled by Bloomberg show. The rate on the 10-year securities was little changed at 4.14 percent after climbing 42 basis points over the past month.

BNP Paribas SA sees “rotation flows” into Malaysian government bonds next year given the political concerns in Thailand and Indonesia, its strategists including Singapore- based Mirza Baig wrote in a Dec. 6 research note.