Fed uncertainty and trade tensions to keep USDMYR in tight range
Performance: The MYR held steady around 4.24–4.25/USD, showing resilience despite the USD Index (DXY) trading above 98.0.
Market Dynamics: The DXY extended gains on Monday following reports of potential 30.0% US import tariffs on goods from the EU and Mexico. A hotter-than-expected US CPI print further boosted USD momentum, with markets now assigning just a 50.0% chance of a Fed rate cut in September. Despite China’s stronger-than-expected 2Q25 GDP and Nvidia’s resumption of AI chip sales to China, risk sentiment remained cautious post-CPI. A softer US PPI print also did little to shift the market’s now less dovish view.
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