SINGAPORE (REUTERS, BLOOMBERG) - Malaysia's ringgit on Friday (Nov 20) jumped more than 2 per cent to its strongest in more than two weeks as investors continued to unwind bearish bets on the worst-performing Asian currency so far this year.
The ringgit rose 2.2 per cent to 4.2520 per US dollar as of 0523 GMT, its strongest since Nov 4.
It also jumped 1.4 per cent against the Singapore dollar, trading at 3.0250 per Singdollar as at 1.41pm from its close of 3.0693 on Thursday. At its lowest trading close this year, the ringgit fell to 3.1351 to the Singdollar on Sept 30.
A rally in oil helped make the ringgit this week's best-performing Asian currency just as demand for the US dollar waned after the Federal Reserve gave a clearer picture over the timing of its interest-rate increase.
The ringgit is headed for the biggest five-day gain since early October as Brent crude rose from its lowest level in more than two months. That helped boost sentiment for the ringgit, which has slumped this year as deteriorating commodity prices cut earnings for Asia's only major net oil exporter.
The Fed's October minutes issued this week gave the strongest signal yet that the central bank will raise rates in December, with the wording for a gradual pace of future increases supporting demand for emerging-market assets.
"Everyone was talking about the Fed hiking and they finally understand now they are going to hike," said Mr Michael Every, head of financial markets research at Rabobank Group in Hong Kong. "Everyone's backing away from the dollar and locking in profits."
Mr Every said that despite the recovery, the ringgit will likely resume its weakening trend now markets have priced in Fed tightening, as focus shifts back to the factors weighing on Malaysia's outlook - general dollar strength, softness in commodities and potential declines in the Chinese currency.