Trade tensions and Fed rate-cut bets to steer direction next week
Performance: While the MYR weakened this week, hovering around 4.23/USD, most ASEAN-5 peers strengthened against the USD.
Market Dynamics: Markets stayed volatile even without key US data, as US-China tensions dominated sentiment. Global equites swung between gains and losses amid mixed trade signals and new port fees that unsettled investors. The USD slipped as risk aversion drove demand for alternative safe havens. Growing conviction of further Fed cuts added pressure, with Powell noting labour market softness and other policymakers signalling 25–50 bps of easing in October. The EUR gained support from improving French political stability. Despite a softer USD, the ringgit underperformed the lack of domestic catalysts, with Budget 2026 providing little market lift.
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