May test 4.80/USD amid persistent Fed's higher-for-longer narrative
Amid signs of easing tensions in the Middle East, the ringgit followed the expected trajectory, strengthening and stabilising within a narrow range of 4.776 to 4.780 against the USD this week. This uptick can largely be attributed to the improved risk sentiment among investors, leading to a softening in USD demand. Coupled with sluggish US PMI and lower-than-expected 1Q24 US GDP reading, the USD index (DXY) depreciated to below the 106.0 level, further contributed to the strengthening of the ringgit. Domestically, a stable inflation rate and ongoing support from authorities have significantly contributed to stabilising the ringgit.
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