Ringgit ends week on strong footing as US bond market concrns weigh on greenback

KUALA LUMPUR — The Malaysian ringgit closed the week on a strong note against the US dollar, despite rising US Treasury yields. The currency was bolstered by increasing Malaysian yields and growing worries that recent US bond-market intervention might weaken the dollar. By 6pm on Friday, the ringgit rose to 4.0365/0405 against the US dollar, up from Thursday's close of 4.0425/0470.

According to Quintex Intel global strategist Stephen Innes, these actions could undermine confidence in US assets, potentially affecting the greenback. He explained to Bernama that efforts to limit long-term US yields might resemble yield-curve management or financial repression, both of which have historically impacted the dollar negatively.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid suggested that the US government should concentrate on boosting revenue and curbing expenditure to curb the growth of US government debt, which recently surpassed $40 trillion for the first time. He noted that a buyback program would merely buy time, as markets would eventually focus on the US fiscal situation to evaluate its state.

By the end of the week, the ringgit had strengthened against a range of major currencies, climbing against the Japanese yen, British pound, and euro, while trading mixed against regional currencies like the Singapore dollar, Philippine peso, Indonesian rupiah, and Thai baht.