Ringgit Weekly Outlook - 19 April 2024

May stabilise with upside potential amid shift in risk sentiment

The ringgit once again traded close to the psychological threshold of 4.800/USD, nearly breaching its all time low of 4.799/USD recorded in February. Strong US data, particularly inflation and retail sales, along with hawkish comments from Fed Chair Powell, have heightened expectations of a delay in the Fed's policy shift. The riskoff sentiment was further exacerbated by developments in the Middle East, prompting a flight to the safe-haven USD. Notably, the Malaysian debt market witnessed significant RM1.0b net outflows on April 15. However, the ringgit managed to recover some losses and trade below the 4.790/USD level as authorities reiterated their readiness to deploy all available tools to support the local currency.