Ringgit falls towards 3-month low after oil slumps

Malaysian ringgit banknotes of various denominations are arranged for a photograph in Kuala Lumpur.
Malaysian ringgit banknotes of various denominations are arranged for a photograph in Kuala Lumpur.PHOTO: BLOOMBERG

KUALA LUMPUR (BLOOMBERG) - Malaysia's ringgit approached a three-month low against the US dollar after a decline in crude oil damped the outlook for the energy exporting economy.

The ringgit fell the most among emerging-market currencies after Brent crude slid almost 3 per cent on Tuesday (Sept 27) before major producers meet in Algiers to discuss limiting output.

The ringgit declined 0.3 per cent to 4.1385 per US dollar as of 10:05 am in Hong Kong after depreciating to 4.1605 on Sept 21, the weakest level since June 27.

Against the Singapore dollar, the ringgit weakened 0.2per cent to 3.0436 per Singdollar as of 11:10 am, from Tuesday's close.

"The ringgit is weaker on the back of lower oil prices," said Khoon Goh, head of regional research at Australia & New Zealand Banking Group in Singapore. "With the first US presidential debate out of the way, the focus turns to the various PMI data due at the turn of the month, and next week's US payrolls number."

Emerging-market currencies rose on Tuesday as investors judged Hillary Clinton won the first US presidential debate, reducing the likelihood a Donald Trump election victory will roil financial markets. The US and China are among nations publishing manufacturing data in the coming week based on purchasing managers' indexes.

The South Korean won gained 0.2 per cent to 1,095.75 per dollar. The won has strengthened 6.9 per cent in the past three months, the best performer behind the South African rand of 24 developing-nation currencies tracked by Bloomberg.

"The won's level has become burdensome and vigilance about possible intervention has risen," Ha Keon Hyeong, an economist at Shinhan Investment Corp. in Seoul, wrote in a report. The currency is likely to trade in range of 1,094 to 1,102, he said.