Ringgit Climbs Against Dollar on Soft US Treasury Yields Ahead of Jackson Hole

The Malaysian ringgit rose against the US dollar on Wednesday due to softer US Treasury yields ahead of the Jackson Hole symposium. The symposium, scheduled for August 27-29, is closely watched as it could provide clues about the Federal Reserve's next move on interest rates.

According to global strategist Stephen Innes, softer US Treasury yields pushed the ringgit up by nearly half a percent. He noted that the flow data support this view, with Bank Negara figures showing roughly RM3 billion of non-resident Malaysian bond accumulation on August 19.

Innes also mentioned that the Jackson Hole symposium could give investors clues about the Fed's next move on interest rates, potentially weakening the US dollar and boosting the ringgit. However, he cautioned that US Fed chair Kevin Warsh is an advocate of not providing forward guidance, leaving the market uncertain about the future path of interest rates.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid also weighed in on the matter, stating that the ringgit appreciated against the US dollar as the prospect of an interest rate hike by the Fed in September looked fairly low. He noted that the US Treasury Department's move to intervene in the bond market suggests that a higher interest rate environment is bad for the government's finances.