Republican trifecta and Fed’s less dovish stance to fuel further sell-off
While we accurately predicted that a Republican trifecta would push the USD Index (DXY) above 105.0, weakening the ringgit to between 4.40 and 4.45, the DXY climbed further to over 106.0, pushing the ringgit near the 4.50 threshold on Thursday. This Republican clean sweep grants Trump control over all government branches, enabling policy influence until at least 2026, with markets now pricing in higher chances of tariffs and deregulation. The widening US policy gap with other developed economies has led investors toward a long-USD stance, while China’s weak stimulus and limited domestic boost weigh on the MYR.
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