To rangebound as trade talks drive sentiment
Performance: The ringgit briefly weakened to 4.32/USD on Tuesday from 4.20/USD (May 5) after a temporary US-China trade truce, while the DXY edged up to 101.0 as expected. However, the decline was short-lived as the ringgit quickly rebounded to around 4.28/USD.
Market Dynamics: The initial USD rally, driven by a 90-day pause in the US-China trade war and pared-back Fed rate cut expectations, quickly faded after softer-than-expected US inflation data. While trade optimism offers intermittent support to the greenback, investors remain focused on fundamentals, especially the durability of US growth. Elevated 10-year UST (around 4.50%) continue to reflect fiscal anxieties and persistent risk premium.
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