Expected US disinflation could cap oil-driven dollar strength
Performance: MYR traded around 4.07-4.09/USD as higher oil prices and hawkish Fed risks lifted the USD.
Market Dynamics: Renewed US-Iran strikes pushed oil prices higher and revived demand for the USD. The ringgit weakened early in the week before stabilising around 4.07-4.08/USD. Higher energy costs reinforced concerns that US disinflation could slow, keeping Fed hawkish risks in focus. FX positioning remained cautious as investors cut carry exposure during risk-off spells but selectively returned to higher-yielding currencies.
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