Tariffs still in focus, but macro to take the wheel; rangebound for now
Performance: EM FX, including the MYR, weakened against the USD, as hopes for a favourable tariff outcome failed to materialise.
Market Dynamics: The ringgit depreciated modestly but remained broadly stable within the 4.24–4.25/USD range. Sentiment soured after Trump’s tariff letter revealed that Malaysia could face a 25.0% tariff, 1.0 ppt higher than the so-called Liberation Day rate. Although the measure is not yet final and the USD index held below 98.0, the market appeared to sell on the news. Domestically, a lower OPR of 2.75% added slight pressure on the ringgit.
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