Set to stay on the back foot as Fed Hawkishness and Iran uncertainty persist
Performance: MYR traded slightly weaker within 3.96-3.98/USD as elevated US yields and firm oil prices supported the USD.
Market Dynamics: Escalating US-Iran tensions and persistent inflation concerns kept global bond markets under pressure. Higher US Treasury yields reinforced broad USD demand, limiting EMFX recovery despite intermittent de-escalation headlines. Markets increasingly viewed the inflation shock as structural rather than fiscal-driven, supporting expectations of a prolonged restrictive Fed stance. FX positioning stayed defensive as stable DXY levels and ongoing foreign inflows into US assets supported USD resilience.
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