Holds firm below 4.20/USD as US–China optimism offsets Fed ambiguity
Performance: The MYR strengthened to around 4.19–4.20/USD this week even as the DXY stayed elevated near 99.5. Renewed market optimism following the Trump–Xi meeting helped support sentiment.
Market Dynamics: Global markets rallied early in the week on hopes of constructive US–China engagement. The ringgit also benefitted from a firmer CNY, with the PBoC guiding the USDCNY fix lower. Meanwhile, the Fed’s 25 bps rate cut was fully expected. Powell’s comment that the Fed is “not on a preset course” tempered expectations of further aggressive easing, with markets now pricing around a 70.0% chance of another cut in December, down from 90.0%. The BoJ’s reluctance to tighten policy continued to lend support to the USD.
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