Malaysia’s ringgit dropped by the steepest margin in nearly a month while the U.S. dollar surged ahead of the scheduled publication of the Federal Reserve’s latest rate meeting later today.
The ringgit fell 1 percent, the most since Jan. 20, to trade at 3.6205 per dollar in Kuala Lumpur. The one-month non-deliverable forwards plunged 1.3 percent to 3.6288. Malaysian markets are expected to be closed on Feb. 19 and 20 for the Lunar New Year.
“The market’s positioning,” Vishnu Varathan, an economist at Mizuho Bank Ltd in Singapore, told Bloomberg News. “They know that in the next two days they cannot react to FOMC minutes and the Greece situation in onshore markets and will be limited to forwards.”
Greece is expected to negotiate with its creditors such as International Monetary Fund and the euro zone members for an extension of its debt agreement for the next six months, easing the current deadlock.
A report released today showed that Malaysia’s consumer prices grew 1 percent in January from the previous year, the weakest pace since November 2009. This lagged the average estimate of 1.9 percent in a Bloomberg poll. The yield on the nation’s sovereign bonds that mature in July 2024 remained slightly unchanged at 3.89 percent.
Elsewhere, the pound surged to its highest level in seven years against the euro as U.K. wage growth surged while unemployment dropped, fuelling inflation prospects and the outlook for higher interest rates. Wages in the U.K. grew 2.1 percent in the fourth quarter, compared with analyst expectations of a 1.7 percent growth. The unemployment rate slid to at least six-year low, reported the Office for National Statistics.
The pound surged 1.1 percent to trade at 73.51 pence per euro as of 5:02 p.m. in London and hit 73.50 pence, its highest level since January 2008. The pound surged 0.5 percent to $1.5426, its first advance in three days. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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