Ringgit Falls Under Pressure From Hawkish Fed Sentiment

The Malaysian ringgit lost value against the US dollar on Friday due to hawkish sentiment surrounding US interest rates. According to Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid, continued signals from US Federal Reserve (Fed) officials have weighed down the foreign exchange market.

Rashid pointed out that indications from Fed officials, including Philadelphia Fed president Anna Paulson, suggest further rate increases are ahead. This led to an increase in US Treasury yields for the two- and 10-year maturities, which rose by six basis points to 4.91% and 5.57%, respectively.

The ringgit traded lower against a basket of major currencies, including the euro, British pound, Japanese yen, Singapore dollar, Philippine peso, Indonesian rupiah, and Thai baht. However, it did gain value against the Indonesian rupiah and Thai baht.