Malaysia’s ringgit dropped for a sixth day, the longest losing streak since February, as a U.S. services gauge that topped estimates stoked speculation the Federal Reserve will cut stimulus before year-end. Bonds fell. The ringgit declined along with other Asian currencies after a report yesterday showed the Institute for Supply Management’s U.S. non-manufacturing index climbed to 55.4 in October from 54.4 the preceding month, more than the 54 forecast by economists in a Bloomberg survey. Readings above 50 signal expansion. Malaysia’s central bank will keep borrowing costs unchanged at 3 percent at a meeting tomorrow, according to all 18 analysts surveyed by Bloomberg. The ringgit depreciated 0.4 percent to 3.1875 per dollar as of 10:09 a.m. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It dropped 1 percent so far this month, the second-biggest loss among Asia’s 11 most-traded currencies after the Indonesian rupiah. The local market was shut for a public holiday yesterday. “Asian currencies are pricing in higher risk of Fed tapering in December,” said Nizam Idris, head of strategy for fixed income and currencies at Macquarie Bank Ltd. in Singapore. “The ringgit is dropping more because it’s more sensitive to the dollar movement.” The Fed maintained its $85 billion monthly bond-buying program last month, while noting signs of “underlying strength in the broader economy.” Policy makers will hold off from trimming the debt purchases until March, according to analysts surveyed by Bloomberg Oct. 17-18. A reduction was earlier forecast for December in a similar survey a month before.
Posted on: Wed, 06 Nov 2013 06:55:33 +0000
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