Ringgit rises against dollar as US Treasury yields ease

KUALA LUMPUR: The Malaysian ringgit began the trading day higher against the US dollar on Wednesday, buoyed by a weaker greenback and easing US Treasury yields, according to an analyst. By 8:04am, the ringgit gained to 4.0380/4.0445 against the US dollar, up from Monday's close of 4.0405/4.0440. The market remained closed on Tuesday in observance of Prophet Muhammad's birthday.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid highlighted that long-term US Treasury bond yields continue to be a key focus, noting that the 30-year US Treasury securities yield fell by six basis points to 5.17%. He also mentioned rumors that the US Treasury department might use the Treasury General Account, held at the Federal Reserve, to finance its buyback program.

Consequently, the US Dollar Index (DXY) declined by 0.10% to 98.905 points. The ringgit could benefit from this, as the US authorities are not inclined towards a higher interest rate environment, he added. However, uncertainty persists regarding the US Federal Reserve's next policy move, making Kevin Warsh's speech at the Jackson Hole Symposium this week a point of keen interest.

At the opening bell, the ringgit traded slightly lower against a basket of major currencies but showed a marginal improvement against the Japanese yen, at 2.5360/2.5402. It also decreased against the British pound, euro, and Singapore dollar, while it rose against the Indonesian rupiah, Philippine peso, and Thai baht.