Range-bound trading expected amid US economic uncertainty
The ringgit traded within a relatively stable range this week, initially weakening to above 4.45/USD on Monday, due to stability in the US equity market. However, it later firmed up, trading between 4.42-4.44 against the USD as global sentiment improved following softer US inflation prints. The USD index dipped below 102.6 after the inflation release, while the 10-year US Treasury (UST) yield fell below 3.85%, as markets fully priced in a September rate cut. To note, the narrowing of the 10-year MGS-UST negative yield differential to an average of -10.8 bps this week (last week: -16.3 bps) has helped attract RM2.3b inflows into Malaysia’s domestic debt market, bolstering the ringgit.
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