Ringgit Tumbles Against Dollar Amid Rising US Treasury Yields

The ringgit opened lower against the US dollar on Tuesday due to elevated US Treasury yields and uncertainty over the Federal Reserve's interest rate outlook.

According to Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, the 30-year US Treasury bond yield has been rising persistently to 5.25% amid expectations that the Fed could maintain a cautious stance on interest rates at its upcoming meeting.

The rise in yields is attributed to Fed chairman Kevin Warsh's speech at the Jackson Hole Symposium, where he indicated that inflation remains high while the labor market remains healthy.

This development seems to contradict the US Treasury Department's aim of lowering long-term bond yields through its buyback plans.