Ringgit Weakens as Warsh Signals Potential Rate Hike

The Malaysian ringgit started September on a weaker footing, falling to 4.0370/4.0410 against the US dollar by 6pm local time as markets digested fresh signals from Federal Reserve chair Kevin Warsh that another rate hike may be approaching.

Warsh's remarks at the Jackson Hole Symposium last Friday have become the central focus for currency traders, with his explicit statement that inflation remains high and the labor market continues to show resilience implying that monetary tightening is all but inevitable in the near term.

Pressure on the ringgit also came from elevated US Treasury yields and renewed uncertainty over the Fed's policy trajectory ahead of the Federal Open Market Committee meeting scheduled for September 15-16.