Ringgit rises against dollar as US Treasury yields ease

KUALA LUMPUR - The Malaysian ringgit opened stronger against the US dollar on Wednesday, buoyed by a decline in US Treasury yields and a weaker greenback, according to an analyst. At 8:04am, the local currency climbed to 4.0380/4.0445 against the US dollar, from Monday's close of 4.0405/4.0440. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid highlighted that long-term US Treasury bond yields are a key focus, with the 30-year US Treasury securities yield dropping six basis points to 5.17%.

He also mentioned reports that the US Treasury department might utilize the Treasury General Account, cash held at the Federal Reserve to support a buyback program. Consequently, the US Dollar Index (DXY) experienced a 0.10% decline to 98.905 points. Rashid noted that the ringgit could benefit as the US authorities do not favor a higher interest rate environment.

He added that uncertainty remains regarding the US Federal Reserve's next policy move, making US Fed chair Kevin Warsh's speech at the Jackson Hole Symposium this week a subject of close observation. The ringgit started the day lower against a basket of major currencies but marginally improved versus the Japanese yen to 2.5360/2.5402, decreased against the British pound to 5.5099/5.5187, fell compared to the euro to 4.7140/4.7215, and rose against regional currencies, including the Indonesian rupiah, Philippine peso, and Thai baht. However, it declined versus the Singapore dollar to 3.1810/3.186 from 3.1805/3.1835.