Ringgit strengthens to 4.0365/0405 against the US dollar as US bond-market intervention concerns and rising Malaysian yields support the local currency.
KUALA LUMPUR: The ringgit ended the week on a strong footing against the US dollar despite higher United States Treasury yields.
The local currency was supported by rising Malaysian yields and growing investor concerns that recent US bond-market intervention could weigh on the greenback.
At 6 pm, the ringgit strengthened to 4.0365/0405 against the US dollar from Thursday’s close of 4.0425/0470.
Quintex Intel global strategist Stephen Innes said these measures could erode investor confidence in US assets, potentially putting pressure on the U.S. dollar.
“The concern is that efforts to suppress long-term US yields could eventually resemble a form of yield-curve management or financial repression which has historically weighed on the greenback,” he told Bernama.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that the US government should focus on raising revenue and reining in expenditure to slow the growth in US government debt, which has surpassed US$40 trillion for the first time.
“A buyback programme would only buy time, with markets eventually turning their attention back to the US fiscal position to make their assessment,” he said.
At the close, the ringgit ended higher against a basket of major currencies.
It climbed versus the Japanese yen to 2.5449/5476 from 2.5527/5557 at Thursday’s close, increased against the British pound to 5.5118/5173 from 5.5164/5225 yesterday and gained vis-a-vis the euro to 4.7227/7274 from 4.7322/7374 previously.
The local note traded mixed against regional currencies.
It appreciated vis-a-vis the Singapore dollar to 3.1809/1843 from 3.1813/1851 yesterday and inched up against the Philippine peso to 6.54/6.55 from 6.55/6.57 at the previous close.
However, the ringgit weakened versus the Indonesian rupiah to 228.1/228.4 from 227.7/228.1 and edged down against the Thai baht to 12.3474/3638 from 12.3014/3211 on Thursday.
