Ringgit leads Asia FX gains on crude oil's rebound

Malaysia's currency reserves increased to US$95.3bil as of Sept 15

SINGAPORE: Malaysia's ringgit led gains among emerging Asian currencies on Wednesday as a rebound in oil prices helped risky assets including regional equities recover some of the previous session's losses. 

Most emerging Asian currencies started the day weaker as growing concerns over global economic recovery hurt risk appetites. 

The U.S. trade deficit widened more than expected in February, indicating growth weakened further in the first quarter. Also, International Monetary Fund Managing Director Christine Lagarde said global growth is fragile and weak. 

While China's service sector strengthened in March, employment fell for the first time in more than 2-1/2 years, a private survey showed. 

However, regional currencies changed direction as crude futures extended gains on hopes for an agreement among oil exporters to freeze output. 

"We are cautious for potential short-term noise in the lead-up to the oil producers' meeting on April 17. That could lift USD/Asia FX," said Christopher Wong, senior FX strategist for Maybank in Singapore, referring to gathering of crude exporters in Qatar. 

"But this is likely to be temporary and we see opportunity to add short USD/Asia FX positions." 

Most emerging Asian currencies have risen so far this year as the U.S. Federal Reserve is seen as cautious on raising interest rates. 

RINGGIT 

The ringgit found further support from stronger-than-expected Malaysia trade data and hit a session high of 3.8950 per dollar. 

Malaysia's exports in February rose 6.7 percent from a year earlier, more than double economists' forecast for 3.1 percent growth, thanks to higher shipments of electrical and electronic products. 

WON 

South Korea's won started the day softer, tracking earlier weakness in global risky assets. The won reversed the losses as foreign investors turned into net buyers of Seoul shares and on exporters' demand for settlements. 

That caused offshore funds to unwind bearish bets on the won. 

Still, traders stayed wary of possible dollar demand stemming from dividend payments by local companies to foreign shareholders. - Reuters