Kuala lumpur: The ringgit ended lower against the greenback on Monday as the threat of an 'economic D-Day' on Iran, policy risks ahead of the Jackson Hole symposium, and continued instability in the US Treasury market spurred caution. At 6 pm, the ringgit eased to 4.0405/0440 against the US dollar from last Friday's close of 4.0365/0405.
According to BERNAMA News Agency, Quintex Intel global strategist Stephen Innes noted that the ringgit traded slightly weaker today, but described the move as cautious consolidation rather than the beginning of a more meaningful decline. Innes pointed out the uncertainty surrounding US Treasury Secretary Scott Bessent's promised 'economic D-Day' against Iran, the policy risks heading into Jackson Hole, and continued instability at the long end of the US Treasury curve as key factors affecting the foreign exchange market.
US President Donald Trump has threatened a significant financial campaign against Iran, referring to it as 'economic D-Day', amidst ongoing tensions with Tehran. Innes highlighted the market's focus on the US's planned sanctions, expected to involve sweeping secondary sanctions against entities handling Iranian oil, especially those in China. The primary concern is whether Washington will add names to existing lists or pose a credible threat to major Chinese banks and buyers, which could significantly impact oil flows and escalate tensions in the Strait of Hormuz.
Innes also observed that the US dollar has strengthened modestly as traders seek some protection against geopolitical and policy uncertainty. However, this has not yet developed into a decisive risk-off move. For now, the ringgit appears to be taking a small step back while investors await greater clarity from Washington and the US bond market.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit moved in a narrow range today, hovering at around RM4.0355 to RM4.0427. He mentioned a bearish sentiment towards the US dollar as market participants await details on debt buy-back by the US Treasury Secretary. It was reported that hedge fund managers are increasing their bearish bets towards the US dollar, as the debt buy-back plan does not address the ballooning US government debt, which has surpassed US$40 trillion.
Bessent surprised Wall Street last Wednesday with a plan to increase buybacks of long-term bonds after the 30-year yield reached its highest level in nearly 20 years. Mohd Afzanizam noted that the 30-year US Treasury yield briefly touched 5.19 percent when the debt buy-back was announced last Thursday but later increased to around 5.25 percent. He also highlighted that the US Dollar Index (DXY) is currently at 98.980 points, below the 99.897 points at the start of the month.
At the close, the ringgit ended higher against a basket of major currencies. It climbed versus the Japanese yen to 2.5380/5402 from 2.5449/5476 at last Friday's close, increased against the British pound to 5.5080/5128 from 5.5118/5173, and gained against the euro to 4.7132/7173 from 4.7227/7274 previously.
The local note traded mixed against regional currencies. It inched up against the Singapore dollar to 3.1805/1835 from 3.1809/1843 last Friday and strengthened against the Indonesian rupiah to 227.9/228.3 from 228.1/228.4. However, the ringgit dipped against the Philippine peso to 6.55/6.56 from 6.54/6.55 and edged down against the Thai baht to 12.3589/3742 from 12.3474/3638 last Friday.