On a Monday morning in late August, the ringgit eased slightly stronger against the US dollar, a movement small enough to pass unnoticed yet carrying the weight of a wider confidence in Malaysia's economy. Bank Muamalat's chief economist reads the modest gain as the natural echo of strong domestic figures, especially July's exports, which hint at firmer growth in the months ahead. Beyond the trading screens, the quiet unease lies in the long shadow of American debt and the Federal Reserve's next choices, which will be weighed at the Jackson Hole gathering later this week.
Ringgit Opens Firmer Against Dollar as Strong Malaysian Data Lifts Sentiment
The move was small, but the explanation was clear
Mark
The ringgit barely moved at the open. Why is this worth noting?
Mimi
Because of the direction and the reason given. It edged up from 4.0365/0405 to 4.0360/0410, and the economist ties it to strong Malaysian data, including July exports.
Luke
Careful, though. The move is tiny, and the explanation is one economist's reading. The export figures themselves aren't given here.
Mark
Fair. What's he actually predicting?
Mimi
A trading range of RM4.03 to RM4.05 today, and possibly another attempt to break RM4.03. He also says exports could point to an upside surprise in second-half growth.
Luke
Note the word 'could.' That's a forecast, not a result.
Mark
And the US side of the story?
Mimi
He says Treasury yields matter, with US debt above US$40 trillion. His argument is that pushing rates down directly would only help briefly, because the fiscal deficit is what counts.
Luke
Again, that's his assessment. The source doesn't say anyone is actually planning such intervention.
Mark
What should readers watch next?
Mimi
Jackson Hole, August 27 to 29, for hints on the Fed's September decision.
Luke
And the regional picture is mixed: stronger against Singapore, flat against the peso, weaker against the baht. So this isn't a uniform rally.
Der Puls
- The ringgit opened at 4.0360 against the dollar, nudging up from Friday's close as traders reacted to fresh Malaysian data.
- Strong July export figures have raised hopes of an upside surprise to Malaysia's second-half growth.
- The currency is pressing again toward the RM4.03 level, with analysts eyeing a day's range of RM4.03 to RM4.05.
- Mixed moves across regional currencies show the gains are not uniform, while US Treasury yields loom as the next source of pressure.
- All eyes now turn to the Jackson Hole Symposium from August 27 to 29 for signals on the Fed's September decision.
On a Monday morning in late August, the ringgit eased slightly stronger against the US dollar, a movement small enough to pass unnoticed yet carrying the weight of a wider confidence in Malaysia's economy. Bank Muamalat's chief economist reads the modest gain as the natural echo of strong domestic figures, especially July's exports, which hint at firmer growth in the months ahead. Beyond the trading screens, the quiet unease lies in the long shadow of American debt and the Federal Reserve's next choices, which will be weighed at the Jackson Hole gathering later this week.
At 8.05 on Monday, August 24, the ringgit stood at 4.0360/0410 against the US dollar, a shade stronger than Friday's close. The gain was slight, but Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia, saw in it a clear reason: Malaysia's recent economic data has been strong. He pointed especially to July's export figures, which he believes could lift growth in the second half of the year beyond expectations.
He expects the currency to stay well supported in the near term, and suggested it might make another attempt to break through RM4.03 today, within an expected range of RM4.03 to RM4.05. Friday had already closed 0.16 per cent higher at RM4.0385, giving that attempt some momentum.
The firmness was not confined to the dollar. Against the yen, the British pound and the euro, the ringgit also edged higher, while against regional peers the picture was mixed: slightly stronger against the Singapore dollar, flat against the peso, and weaker against the Thai baht.
Looking ahead, Mohd Afzanizam cautioned that long-term US Treasury yields will matter greatly. With American government debt above US$40 trillion, he argued that any attempt to force market rates down would offer only a temporary effect, since the fiscal deficit is what ultimately counts. The next marker is the Jackson Hole Symposium from August 27 to 29, where investors will look for clues on the Federal Reserve's September move.
At 8.05 am on Monday, August 24, the ringgit stood at 4.0360/0410 against the US dollar, a shade stronger than Friday's close of 4.0365/0405. The move was small, but it came with a clear explanation from an economist: Malaysia's recent economic data has been strong.
That view comes from Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, who spoke to Bernama. He expects the currency to stay well supported in the near term. Among the data he pointed to were July's export figures, which he said could signal an upside surprise in economic growth in the second half of the year.
He also put Friday's performance in context. The ringgit closed that day 0.16 per cent higher against the dollar, at RM4.0385. Building on that, he suggested the currency might try once more to break through the RM4.03 level on Monday. His expected range for the day was RM4.03 to RM4.05 against the greenback.
The opening gains extended beyond the dollar. Against the Japanese yen, the ringgit rose to 2.5403/5436 from 2.5449/5476 at Friday's close. Against the British pound it moved to 5.5108/5176 from 5.5118/5173, and against the euro it climbed to 4.7161/7219 from 4.7227/7274.
Regional currencies told a more mixed story. The ringgit strengthened against the Singapore dollar to 3.1805/1846 from 3.1809/1843, and edged up against the Indonesian rupiah to 228.0/228.4 from 228.1/228.4. It was flat against the Philippine peso at 6.54/6.55. Against the Thai baht it edged lower, to 12.3675/3881 from 12.3474/3638.
Beyond domestic data, Mohd Afzanizam said market participants would be watching long-term US Treasury yields. He noted that efforts to bring market interest rates down directly could run into difficulty, since US government debt has passed US$40 trillion. Any such intervention, he said, would have only a transitory effect, because what ultimately matters is the size of the fiscal deficit.
The next marker is the Jackson Hole Symposium, running from August 27 to 29. Investors will be looking to it for clues about what the US Federal Reserve might do at its September meeting, and the ringgit's attempt at RM4.03 will be measured against whatever signals emerge.
Bemerkenswerte Zitate
Such intervention would only have a transitory effect, as what really matters is the size of the fiscal deficit.— Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
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