Ringgit slips as markets weigh US ‘economic D‑Day’ threat and Jackson Hole risks
KUALA LUMPUR, Aug 24 — The ringgit ended lower against the greenback today 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 6pm, the ringgit eased to 4.0405/0440 against the US dollar from last Friday’s close of 4.0365/0405.
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.
“Given 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, there is plenty for the foreign exchange market to digest,” he told Bernama.
US President Donald Trump has threatened a crushing financial campaign against Iran, which he has referred to as “economic D-Day”, as the war on Tehran continues to drag on.
According to Innes, the market is closely watching the US’s planned economic D-Day sanctions as it is expected to involve sweeping secondary sanctions against buyers, banks, refiners, vessels and intermediaries handling Iranian oil, particularly China’s independent refiners and payment networks. “The real market question is whether Washington merely adds names to existing lists or credibly threatens major Chinese banks and buyers. Only the latter would materially tighten oil flows and increase Tehran’s incentive to retaliate through the Strait of Hormuz,” he added.
Innes said the US dollar has strengthened modestly as traders seek some protection against geopolitical and policy uncertainty, but this has yet to develop into a decisive risk-off move. “For now, the ringgit appears to be taking a small step back while investors wait for greater clarity from Washington and the US bond market,” he added.
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.
“There seems to be a bearish mode towards the US dollar as market participants await the details on debt buy-back by the US Treasury Secretary. It was reported in the news that hedge fund managers are increasing their bearish bets towards the US dollar as the debt buy-back will not address the already ballooning debt, which surpassed US$40 trillion, incurred by the US government,” he said.
It was reported that Bessent surprised Wall Street last Wednesday with a plan to increase buybacks of long-term bonds, after the 30-year yield hit the highest level in nearly 20 years.
Mohd Afzanizam said the 30-year US Treasury yield briefly touched 5.19 per cent when the debt buy-back was announced last Thursday, but the yield later went up again and is currently lingering around 5.25 per cent.
He noted that the US Dollar Index (DXY) is presently at 98.980 points, which is below 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 vis-a-vis the euro to 4.7132/7173 from 4.7227/7274 previously.
The local note traded mixed against regional currencies.
It inched up vis-à-vis the Singapore dollar to 3.1805/1835 from 3.1809/1843 last Friday, and strengthened versus 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.
