The Malaysia’s ringgit halted a three-day losing streak on bets that the strong Chinese economic data will spur a rush for emerging-economy assets. The ringgit rose 0.4 percent to 3.1970 per dollar at the close of trading in Kuala Lumpur. The currency has declined 0.7 percent over the last three intraday sessions.
Data released last week indicated that China’s trade surplus rose to a new high, exceeding economist’s forecasts. China, which is Malaysia’s largest overseas market, is expected to release July’s loan issues data this week.
“China’s positive data will be encouraging for Asian currencies,” Nizam Idris, a Singapore-based head of strategy for fixed income and currencies at Macquarie Bank, told Bloomberg. “Malaysia’s stronger-than-expected factory output will provide some slight support to the ringgit.”
The ringgit’s one-month implied volatility, which measures the expected swings in the currency exchange rate used to assign value to options, fell 0.05 percentage point or 5 basis points, to 6.05 percent.
The yield on the 10-year Malaysian government bonds remained slightly unchanged at 3.87 percent, having declined three basis points over the past week.
Meanwhile, the Turkish Lira plunged against the dollar after Prime Minister Recep Tayyip Erdogan won the presidential elections. The lira fell 0.4 percent to 2.1537 per dollar, eroding earlier advances. The Turkish currency fell 0.5 percent versus the US currency last week as violence broke out in Syria, Iraq, and Armenia and in Ukraine.
Erdogan clinched 52 percent of the vote and is expected to assume office on Aug. 28. He will have 45 days to appoint his successor, who will be the head of the government. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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