Ringgit stays bullish against greenback at close as US debt weighs on US dollar

Malaysia's currency, the ringgit, continued its upward trend against the US dollar on Thursday, as the country's national debt surpassed $40 trillion for the first time, putting downward pressure on the greenback. By 6 p.m., the ringgit had gained 140 pips to trade at 4.0425/0470 against the US dollar, up from Wednesday's close of 4.0565/0610.

Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, noted that the US Treasury Department's efforts to contain excessive Treasury yields had become a focal point recently. The intervention in the treasury markets to prevent long-term yields from rising too rapidly was the primary factor influencing market sentiment.

The 30-year US Treasury yields were hovering around 5.22 percent after briefly surpassing 5.30 percent. This could indicate that the US Federal Reserve is less likely to raise the Federal Funds Rate during its next meeting in September. By the close of trading, the ringgit was weaker against other major currencies, dropping against the Japanese yen, British pound, and euro, while also weakening against the Indonesian rupiah, Thai baht, and Singapore dollar. However, it showed a slight gain against the Philippine peso, ending at 6.55/6.57.