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Ringgit Weakens as Surge in U.S. Yields Narrows Rate Advantage

fareastz

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Ringgit Weakens as Surge in U.S. Yields Narrows Rate Advantage
December 14, 2010, 9:09 PM EST

By David Yong

Dec. 15 (Bloomberg) -- Malaysia’s ringgit slipped from a three-week high on concern a surge in U.S. bond yields will reduce demand for emerging-market assets.

The currency dropped as a report in the U.S. showed retail sales rose in November by more than economists forecast in a Bloomberg survey, bolstering demand for the dollar. The Federal Reserve yesterday maintained its bond-buying program at $600 billion and said the recovery “is continuing.”

“Higher yields in the U.S. will make the ringgit and other high-yielding assets in the region less appealing,” said Zaki Talib, a currency trader at RHB Bank Bhd. in Kuala Lumpur. “Dollar-ringgit will likely gap up when liquidity dries up going into the year-end.”

The ringgit weakened 0.1 percent 3.1285 per dollar as of 9:37 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency reached 3.1230 yesterday, the highest level since Nov. 23. Today’s decline eroded the ringgit’s advance this year to 9.2 percent.

The Dollar Index, which tracks the currency against those of six major trading partners, climbed 0.2 percent, a second day of gains.

Sales at U.S. retailers rose 0.8 percent in November, compared with the median estimate of 0.6 percent in the Bloomberg survey. The Fed kept its benchmark interest rate at between zero and 0.25 percent, unchanged since December 2008.

Ten-year Treasury yields jumped 20 basis points yesterday to 3.48 percent, narrowing the gap with similar-maturity Malaysian government bonds to 44 basis points, the least since May, according to data compiled by Bloomberg.

--Editors: Simon Harvey
 
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qba437

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aku tak berapa faham sangat..adakah ini bermakna nilai dolar melonjak semula atau bagaimana?
 
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