Broad USD weakness and budget optimism to keep USDMYR near 4.20
Performance: The ringgit failed to deliver the gains we anticipated, as the USD index (DXY) held firm near the 98.0 mark. USDMYR traded in a narrow 4.21–4.22 range over the week.
Market Dynamics: Robust US data last week lifted the DXY, aided by a positioning squeeze. Although fears of a government shutdown initially weighed on the USD, its eventual occurrence barely moved the currency; investors instead turned more cautious and selective. Softer oil prices pressured the USD and boosted the JPY's appeal as an alternative. With non-farm payrolls cancelled, the weak ADP report triggered further dovish repricing, pushing the USD lower.
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