Malaysia’s ringgit and 10-year bonds headed for weekly drops before a speech by Federal Reserve Chair Janet Yellen that may provide clues on the timing of U.S. interest-rate increases.
Yellen speaks today in Jackson Hole, Wyoming after housing and manufacturing data yesterday indicated the world’s largest economy is continuing to strengthen. Minutes of the U.S. central bank’s July meeting released this week suggest the Fed will raise borrowing costs next year.
“Asian currencies, including the ringgit, are weaker this week because the market is pricing-in an earlier than expected interest-rate increase in the U.S.,” said Saktiandi Supaat, the Singapore-based head of foreign-exchange research at Malayan Banking Bhd. “If Yellen’s speech is hawkish, Asian currencies are expected to fall further.”