Ringgit Slides as US Treasury Yields Surge Amid Fed Uncertainty

The ringgit opened lower against the US dollar on Tuesday due to elevated US Treasury yields and uncertainty over the US Federal Reserve's interest rate outlook. At 8 am, the local currency eased to 4.0300/0350 against the greenback from last Friday's close of 4.0230/0270.

According to Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid, the 30-year US Treasury bond yield has been rising persistently to 5.25 per cent amid expectations that the Fed could maintain a cautious stance on interest rates at the upcoming Federal Open Market Committee meeting on September 15-16.

This development follows Fed chairman Kevin Warsh's speech on Friday at the Jackson Hole Symposium, where he explicitly indicated that inflation remains high while the labour market remains healthy.