Edging closer to 4.00/USD amid year-end USD selling
Performance: The ringgit surprised to the upside, appreciating to below 4.05/USD for the first time since February 2021.
Market Dynamics: Despite stronger US 3Q25 GDP growth and lower weekly jobless claims, the DXY fell below 98.0 for the first time in three months as markets judged the tightening cycle largely complete. Expectations of eventual easing capped USD strength and supported higher-carry EM FX like the ringgit. Foreign holdings of Malaysian bonds rose above RM300.0b last week for only the second time on record, driven by RM3.3b in net foreign inflows. Continued foreign bond buying, alongside export-related repatriation flows, likely provided additional support to the ringgit.
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