Solid USD demand may keep the pair above 4.70, especially if the Fed signals a tighter-for-longer policy
Despite the unexpectedly robust nonfarm payroll and the hotterthan-expected US core inflation readings, the ringgit traded stronger, hovering around the 4.678 - 4.686 level against the USD from Monday to Thursday. The USD index (DXY) did not surge as it had in last month’s above-consensus release, possibly due to the ambiguous nature of the job report. The ringgit's resilience can partly be attributed to strong domestic readings (i.e. IPI), signalling brighter growth prospects for Malaysia. Additionally, government efforts to repatriate foreign investment income and interventions by the BNM could also be supporting the strength of the ringgit.
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