Ringgit extends gains against dollar amid US debt concerns

KUALA LUMPUR: The Malaysian ringgit continued to strengthen against the US dollar on Thursday as concerns over the size of US national debt impacted the greenback. The ringgit reached 4.0425/4.0470 against the US dollar at 6pm, marking a 140 pip gain from the previous close of 4.0565/4.0610. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid attributed the positive sentiment to the US government's intervention in the treasury markets to prevent excessive increases in long-term yields.

"Direct intervention by the US government in the treasury markets to stem the rise in long-term yields was the main driver in traders' sentiment. The 30-year US Treasury yields are currently hovering around 5.22% after exceeding 5.30% recently. The move could mean the US Federal Reserve is less inclined to raise the Federal Funds Rate in the next Federal Open Market Committee meeting in September," Rashid told Bernama.

Despite the ringgit's gains against the US dollar, it weakened against other major currencies, including the Japanese yen, British pound, and euro.