Ringgit Declines as Weak U.S., China Data Dim Export Outlook

Ringgit Declines as Weak U.S., China Data Dim Export Outlook



By Elffie Chew

· April 16 (Bloomberg) -- Malaysia’s ringgit dropped the most in a month as weaker economic data from the U.S. and China dimmed the outlook for the Southeast Asian nation’s exports.

· Government bonds were steady.

· Confidence among U.S. homebuilders unexpectedly fell in April for a third month and manufacturing in the New York region expanded less than projected, data showed yesterday. That followed a report China’s economic expansion slowed to 7.7 percent in the first quarter from a year earlier, versus 7.9 percent in the preceding three months. Malaysia reported earlier this month exports contracted 7.7 percent in February. China and the U.S. are the country’s third and fourth biggest overseas markets.

· “Economic data from China was a real wet blanket,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “There’s no reason for people to go long on risk as data from U.S. are also looking soft.”

· The ringgit weakened 0.2 percent to 3.0468 per dollar as of 9:34 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. That’s the most since March 15. One-month implied volatility, a measure of expected moves in exchange-rates used to price options, climbed 14 basis points, or 0.14 percentage point, to 7.12 percent.

· The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 42, less than the 45 projected by economists and 44 in March, the Washington-based group said yesterday. Readings below 50 mean more respondents said conditions were poor. The Federal Reserve Bank of New York’s general economic index dropped to 3.1 this month from 9.2 in March. The median projection of 47 economists surveyed by Bloomberg was 7.

· Gains in consumer prices in Malaysia probably accelerated to 1.6 percent in March from 1.5 percent in the preceding month, according to the median forecast of 17 economists surveyed by Bloomberg News before data due tomorrow.

· Malaysian government bonds were little changed. The yield on the 3.26 percent notes due March 2018 held at 3.16 percent, according to data compiled by Bloomberg.