Ringgit opens higher against US dollar as US treasury yields ease

KUALA LUMPUR: On Wednesday, the Malaysian ringgit began the day higher against the US dollar, aided by the greenback's decline and easing US Treasury yields, according to an analyst. By 8:04am, the ringgit had climbed to 4.0380/0445 against the US dollar, up from Monday's closing rate of 4.0405/0440. The market had been shut on Tuesday to observe Prophet Muhammad's birthday.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that long-term US Treasury bond yields continue to be a focal point, with the 30-year US Treasury securities yield falling by six basis points to 5.17 percent. Dr Rashid pointed out that there are reports the US Treasury Department may use the Treasury General Account, cash held at the Federal Reserve, to finance a buyback program.

Consequently, the US Dollar Index (DXY) fell by 0.10 percent to 98.905 points. Dr Rashid suggested that the ringgit may benefit from the US authority's lack of support for higher interest rates. However, uncertainty persists regarding the US Federal Reserve's next policy move, making US Fed chair Kevin Warsh's speech at the Jackson Hole Symposium a key focus this week.