THE Malaysian ringgit climbed to its strongest level in more than a year on Wednesday on a strong economic growth outlook, while emerging Asian equities extended gains on optimism that the U.S. Congress will soon end the federal government shutdown.
The ringgit firmed 0.3% against the U.S. dollar to 4.118, its highest level since September 30 last year. The currency is on track for a seven-session winning streak, its longest since early August last year, and has been the best performer in the region this year with an 8% gain.
The recent conclusion of a trade deal with the U.S. and implementation of structural and fiscal reforms are helping the ringgit, said Michael Wan, MUFG’s senior currency analyst.
Strong bond inflows backed by a robust economic growth outlook are also propping up the currency, Maybank analysts said in a note.
A Reuters poll showed that Malaysia’s economy grew at its fastest clip in a year in the third quarter ended September, driven by a rebound in key sectors and steady household demand.
Elsewhere, the South Korean won weakened another 0.5% on the day, to 1,470 against the U.S. dollar, its lowest since early April.
South Korean President Lee Jae Myung directed officials on Tuesday to prepare tax incentives for long-term stock investors, according to reports, sending the benchmark equity index up 1.2% on Wednesday.
Equities in the region were largely buoyed by optimism surrounding the U.S. government reopening.
The MSCI gauge of EM Asia equities, in which South Korea and Taiwan account for around 40% of the index, rose half a percentage point.
Taiwan’s benchmark stock gauge advanced more than 1%, led by a 1.4% gain in TSMC. Singapore’s FTSE Straits Times index scaled a fresh high of 4,556.65 points, led by lenders OCBC and United Overseas Bank.
In Manila, stocks rose 1.6% and were headed for their best session in more than a month, while those in Kuala Lumpur and Bangkok slipped 0.3% and 0.7%, respectively.
Indonesia’s benchmark stock index jumped 0.4% to trade above 8,400 points after slipping below that level in the previous two sessions.
Top lenders Bank Central Asia, Bank Mandiri and Bank Rakyat Indonesia gained up to 1% each.
HIGHLIGHTS:
** Yield on Indonesia’s 10-year bonds flat at 6.160%
** Australia and Indonesia announce new security treaty
** POLL-Japanese manufacturers’ sentiment surges to highest in nearly four years
** Vietnam eyes tariff deal soon, as US seeks to cut huge trade deficit – Reuters
