Set for a tight range of 3.90-3.93 as core PCE and geopolitics steer USD direction
Performance: As expected, the MYR traded broadly within 3.90 – 3.91/USD, consolidating as the USD regained modest ground.
Market Dynamics: Recent US macro resilience has not lifted the USD to January highs. Conviction remains fragile and “sell America” sentiment lingers. Higher oil prices, driven by tensions in the Strait of Hormuz, and Japanese investment flows provide some support. FOMC minutes signalled a balanced outlook: further hikes remain possible, but softer data leaves room for future cuts. A dovish RBNZ pivot also dampened pro-cyclical FX expectations and challenged the view that stronger global growth will automatically trigger hawkish repricing.
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