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Monday, 2 September 2013
Ringgit Declines Most in Asia as Fed Seen Paring Debt Purchases
By Liau Y-Sing - Sep 1, 2013 7:33 PM PT
Malaysia’s ringgit dropped the most in Asia on speculation that outflows will accelerate on prospects of a reduction in U.S. monetary stimulus this month. Government bonds retreated.
American employers added 180,000 jobs in August, after an increase of 162,000 in July, a Bloomberg survey showed before a Sept. 6 report. The Federal Open Market Committee meets Sept. 17-18 to review the policy known as quantitative easing. Global funds cut holdings of Malaysian government and corporate debt in July by the most since September 2011, central bank data show. The Obama administration is on a campaign to persuade U.S. lawmakers that a military strike against Syria is justified.
A customer hands over Malaysian ringgit banknotes to a baker at a market in the Pandamaran area of Klang, Selangor, Malaysia. The ringgit retreated 0.2 percent, the most among the 11 most-traded Asian currencies, to 3.2927 per dollar as of 10:23 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. Photographer: Sanjit Das/Bloomberg
“Markets think non-farm payrolls would affirm, rather than subtract from, sentiments that QE taper would be started,” saidVishnu Varathan, an economist at Mizuho Bank Ltd. inSingapore. “They are still watching the very dynamic and evolving situation with regard to Syria.”
The ringgit retreated 0.2 percent, the most among the 11 most-traded Asian currencies, to 3.2927 per dollar as of 10:23 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell eight basis points, or 0.08 percentage point, to 9 percent.
Foreign ownership of Malaysian securities declined 5.7 percent to 216 billion ringgit ($66 billion) in July, Bank Negara figures show. Overseas investors hold 28 percent of the nation’s government bonds, compared with 18 percent for Thailand, according to central bank data.
The yield on the 3.26 percent sovereign notes due March 2018 advanced two basis points to 3.70 percent, according to data compiled by Bloomberg.