Fed's dovish stance likely to boost risk-on assets
The ringgit strengthened against the USD, trading below the 4.70 threshold as anticipated, driven by a decline in the USD Index (DXY) near the 104.0 mark and a drop in the 10-year US Treasury yield below 4.30%. The DXY's weakness is primarily due to rising expectations of a September rate cut by the Fed, following an ontarget PCE inflation report, weak spending figures last Friday, and softer US job data this week. Despite support from the Bank of Canada rate cut, the European Central Bank's hawkish stance had little to no effect on the DXY. In addition to USD weakness, the ringgit was bolstered by the improvement in Malaysia's manufacturing PMI (50.2; May: 49.0).
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