Eyes 4.20/USD support on likely BNM hold, tariff risks and reforms bets build
Performance: The ringgit strengthened more than anticipated, trading between 4.20 and 4.23/USD as DXY dipped below 97.0 for the first time since February 2022.
Market Dynamics: The DXY came under pressure after the US Senate passed Trump’s fiscal bill, projected to add USD3.3t to US debt over the next decade, intensifying concerns over US fiscal sustainability. Investors rotated into the EUR and CHF, despite their lower yields, as they sought liquid alternatives to the USD amid long-term structural worries. Still, the DXY later rebounded above 97.0, buoyed by stronger-than-expected JOLTs and manufacturing data.
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