Ringgit opens lower amid elevated US Treasury yields
The local currency eases to 4.0300/4.0350 on uncertainty over the US Federal Reserve’s interest rate outlook.
On Tuesday, the Malaysian ringgit began trading below the US dollar due to high US Treasury yields and doubt surrounding the Federal Reserve's interest rate strategy, according to an analyst. At 8am, the local currency fell to 4.0300/4.0350 against the US dollar from last Friday's close of 4.0230/4.0270. Afzanizam Rashid, chief economist at Bank Muamalat Malaysia Bhd, explained that the persistent 30-year US Treasury bond yield increase to 5.25% was a result of inflation concerns and healthy labor market expectations, following Fed Chair Kevin Warsh's comments at the Jackson Hole Symposium.
This signal of potential interest rate hikes contradicted the Federal Reserve's goal of lowering long-term bond yields through buyback plans. This week, analysts are focusing on Nonfarm Payroll (NFP) data, with estimates showing a recovery of 58,000 jobs in August after a 23,000 loss in the previous month. Additionally, Afzanizam warned that the ringgit could remain uncertain against the US dollar due to renewed US-Iran military clashes, causing Brent crude prices to rise to $90.49 per barrel.
At the opening, the ringgit was mostly stronger against a basket of major currencies, including the British pound, euro, and Japanese yen, but weaker against regional currencies like the Singapore dollar, Indonesian rupiah, Thai baht, and Philippine peso.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Ringgit slips as US Treasury yields rise, Fed outlook weighs malaymail.com
- Ringgit opens lower amid elevated US Treasury yields freemalaysiatoday.com
- Ringgit opens lower amid elevated US treasury yields nst.com.my
