A 2.6% surge in the Malaysian Ringgit against the dollar Monday magnified a small upswing in crude palm oil futures on Bursa Malaysia, sending Asian PME prices higher.
Dollar-denominated CPO front month futures rose by more than $8/mt Monday to $650.08/mt due to the currency movement, while non-RED PME was assessed up $7/mt over the same period at $742/mt FOB Southeast Asia.
The ringgit strengthened 2.6% against the dollar to 4.0995 Monday from 4.142 Friday as the dollar weakened on bearish US May non-farms payrolls data that came on Friday at 38,000, well below the consensus forecast of 123,000.
The ringgit had been steadily weakening against the dollar since hitting a year-to-date high April 20 at 3.8656.Movements in the ringgit are more typically linked to oil prices, as the currency tends to rise in tandem with oil.
However Monday's rise in the ringgit was due mainly to the weakness in the dollar following US data, said an Asian producer.
Movements in the ringgit-dollar exchange rate directly affect the price of CPO in Malaysia and palm oil and its related products like refined, bleached and deodorised palm oil and PME.
