Ringgit gains as US debt weighs on greenback
At 8am, the local currency strengthened to 4.0455/4.0540 against the US dollar from Wednesday’s close of 4.0565/4.0610.
KUALA LUMPUR: On Thursday, the ringgit opened stronger against the US dollar due to worries over mounting US government debt, according to economist Afzanizam Rashid of Bank Muamalat Malaysia Bhd. Public debt has surged over $40 trillion in less than five years, with the US Treasury attempting to lower long-term yields through direct intervention in the bond market.
If the Federal Reserve raises interest rates soon, it could hinder the US government's ability to repay its debts, benefiting the ringgit. The US Dollar Index slipped 0.86% to 98.798 points as the likelihood of a September rate hike decreased. Rashid predicts the ringgit will favorably fluctuate between RM4.04 and RM4.06 against the US dollar today.
At opening, the local currency was weaker than the greenback at 4.0455/4.0540, up from Wednesday's close of 4.0565/4.0610. It declined against the Japanese yen and British pound, but strengthened against the euro and Indonesian rupiah, and saw mixed performance against the Singapore dollar and Thai baht.
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- Ringgit gains as US debt weighs on greenback, easing rate hike expectations nst.com.my
- Ringgit gains as US debt weighs on greenback freemalaysiatoday.com
