Bracing for US inflation and tariff volatility; stabilisation likely near current levels
Performance: As expected, the ringgit strengthened this week, trading within the 4.23–4.24/USD range, after a weaker-than expected US jobs report pulled the greenback lower.
Market Dynamics: Friday’s soft payrolls print dragged the DXY below 99.0, prompting markets to reprice the USD lower. Traders now expect the Fed to deliver three 25 bps rate cuts this year. Political drama in the US, spurred by Trump’s firing of the BLS chief, Fed Governor Kugler’s resignation and the US–India tariff spat, has injected fresh risk premium into US assets. Optimism over a potential Ukraine–Russia truce and dovish remarks from Fed officials, who flagged weakening labour conditions, further pressured the USD.
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