Under pressure: Ceasefire scepticism and US data to keep USDMYR elevated
Performance: The MYR rebounded to 3.98/USD as Brent eased, though scepticism over the fragile ceasefire capped further gains.
Market Dynamics: Renewed Israeli strikes in Lebanon undermined hopes for near-term regional de-escalation despite the announced ceasefire. Crude prices retained two-thirds of their geopolitical risk premium as markets questioned the truce's durability. Strong US payroll data and rising inflation expectations reinforced USD strength against EM FX, prompting investors to pare short-USD positions and adopt defensive stances ahead of the Islamabad talks.
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