En route to break above 4.35/USD if Fed signals fall short of market expectations
The ringgit initially depreciated to around 4.37/USD on Monday, following Friday’s US jobs report, which failed to convince markets of a 50 bps rate cut, prompting a USD rebound. It then stabilised at around 4.33–4.34, buoyed by a favourable result from the US Presidential debate, which reduced the perceived chances of a Trump victory, limiting USD gains. Although core inflation surged to 0.3% MoM (Consensus: 0.2%), markets continue to price in a total of 100 bps in Fed cuts for the year, while the yield curve remains dis-inverted, signalling slower growth ahead. Domestically, strong retail sales and IPI readings helped support the ringgit.
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