Rally extends as softer USD and domestic flows anchor the pair around 4.10-4.15
Performance: The ringgit firmed below 4.13/USD, its strongest level since late September 2024, and outperformed all A5 currencies.
Market Dynamics: The ringgit has climbed steadily from 4.18 last Friday to 4.13/USD yesterday. The DXY has only softened marginally towards 99.0 after Trump signed the federal funding package, ending the shutdown, while ADP data pointing to job losses added further pressure on the USD. Onshore, expectations of firmer growth, steady bond inflows, and the prospect of exporters repatriating foreign earnings have helped lift the ringgit.
Data Impact: Despite US reopening, uncertainty lingers over when delayed US data will be released. The White House signalled that October CPI is unlikely to appear, though nonfarm payrolls may surface as early as next week. Once releases resume, soft prints could trigger a dovish repricing and weigh on the USD. Domestically, exports and CPI are due. We expect another solid trade reading and slightly higher but still benign inflation, both supportive of the ringgit. We are also watching Japan closely as the yen edges toward the sensitive 155.0/USD level, which raises the risk of intervention.
Download Full Content:
