Malaysia’s ringgit rose to an 11- week high after slowing inflation suggested China isn’t under pressure to raise interest rates, supporting demand from the Southeast Asian nation’s second-biggest export market.
Consumer prices in Asia’s largest economy rose less than forecast in March, official data showed yesterday. U.S. stocks climbed following the figures, giving the Standard & Poor’s 500 Index its first back-to-back gain in more than three weeks. U.S. economic conditions are far from where policy makers want them to be, Federal Reserve Chairman Ben S. Bernanke said April 8, an indication the Fed will continue with its bond-buying program.
“There’s a cautious risk-on theme and the ringgit also benefits from the fact that China is not going to rush into tightening,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “Markets have scaled back expectations of an exit strategy for the quantitative easing.”
The ringgit climbed 0.4 percent to 3.0243 per dollar as of 9:08 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency touched 3.0225, the strongest level since Jan. 21. One-month implied volatility, a measure of expected moves in exchange rates used to price options, rose six basis points, or 0.06 percentage point, to 6.61 percent.
Government bonds advanced for a sixth day. The yield on the 3.26 percent notes due March 2018 fell one basis point to 3.18 percent, according to data compiled by Bloomberg.
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