Ringgit Surges Against Major Currencies Amid Rising US Treasury Yields

The Malaysian ringgit opened higher against the US dollar and most major currencies on Friday. The local currency rose to 4.0810/0865 against the greenback from Thursday's close of 4.0840/0880.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed this movement to continued influence by US Treasury yields, specifically the 30-year bond yield which rose eight basis points to 5.48 per cent, its highest level in two decades.

Afzanizam noted that a rising long-term bond yield implies an inflation risk premium is building up due to heightened geopolitical risks in West Asia exerting upward pressure on crude oil prices. This appears to have supported the US Dollar Index (DXY), which rose 0.19 per cent to 101.285 points, amid expectations of continued tightening monetary policy by the US Federal Reserve.