To hold near 3.90/USD as Fed pause risk and geopolitics shape near term direction
Performance: The ringgit held firmly below 3.90/USD throughout the week despite the DXY stabilising near the 98.0 level.
Market Dynamics: The USD started weaker as investors recalibrated trade risk after Trump replaced the IEEPA tariff regime with a 15.0% surcharge, reducing tail risk of aggressive trade escalation. Growth slowed in 4Q25, while core PCE surprised higher, complicating US disinflation path. Improved risk appetite following Nvidia earnings supported Asian exporters and portfolio inflows, allowing the ringgit to strengthen even as the DXY held steady. Regional currencies also tracked a firmer yuan.
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