Higher oil prices pull up ringgit, most currencies steady
BENGALURU, Nov 10 — The Malaysian ringgit advanced today and was set to post its biggest weekly gain in more than two months, bolstered by firmer oil prices and the prospect of higher interest rates in the Southeast Asian economy.
The Malaysian ringgit rose 0.3 per cent against the dollar on the day, extending its gains to more than 1 per cent for the week — the biggest weekly gain since September.
Yesterday, Bank Negara Malaysia (BNM) left its benchmark rate unchanged, however, it said it may review “the current degree of monetary accommodation” to ensure sustainable growth.
Maybank said in a report that the shift in BNM’s bias was in line with its view for a 25-basis-point rate hike in 2018, with the first hike set for probably as early as May. On the other hand, the Indian rupee was down nearly a quarter of a per cent due to rising crude oil prices, which were hovering near two-year highs.
India is Asia’s second-largest oil importer, after China. Other regional currencies were trading flat on the day.
Yesterday, US Republican Senators said they want to slash the corporate tax rate in 2019, later than the House of Representative’s proposed schedule of 2018, complicating a push for the biggest overhaul of US tax law since the 1980s.
Andy Ji, Asia currency strategist at Commonwealth Bank of Australia, said it would help Asian currencies gain against the dollar for the rest of the year.
“The delay is a big disappointment to the dollar,” he said The dollar index, which gauges the greenback against a basket of six major rivals, was on track for its biggest weekly loss in a month, after skidding 0.36 per cent in the previous session.
It was up 0.05 per cent at 94.500 on the day.
US President Donald Trump’s visit to China, which ended on Thursday, did not bring fresh jitters to the market.
Trump pressed China to do more to rein in North Kora and said bilateral trade had been unfair to the United States, but praised Xi’s pledge that China would be more open to foreign firms.
“Trump’s toned-down approach toward China, possibly setting the stage for friendly economic ties between the world’s two big economies, is positive for the rest of Asian economies and markets,” ING said in a report.
Investors were also a little cautious ahead of major economic data such as China’s industrial output and third quarter GDP for Malaysia and the Philippines next week. The following table shows rates for Asian currencies against the dollar at 0445 GMT. — Reuters