Faces pressure as USD strengthens amid US optimism and Trump’s resurgence
Performance: As anticipated, the ringgit closed 2024 slightly stronger than expected at 4.472, reflecting a 2.7% appreciation from the end-2023 level. On a weekly basis, the ringgit slipped 0.2% against the greenback as the USD index (DXY) surged past 109.0, a more than two-year high. The DXY rally was driven by US economic optimism and investor positioning for a stronger USD ahead of Trump's return to power.
Market Dynamics: Weakness in the EUR, caused by expectations of Fed-ECB policy divergence and eurozone economic fragility, further bolstered the DXY, pressuring emerging-market currencies.
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