Poised to test 4.65/USD amid expectations of a dovish Fed
As expected, the ringgit stabilised below the 4.68/USD and strengthened towards 4.66/USD level, partly due to Malaysia's robust 2Q24 advance GDP reading and as the USD index (DXY) holding steady around 104.4. The DXY's muted movement was due to a lack of pro-USD catalysts and ongoing market pricing in a September Fed rate cut. Additionally, lacklustre Big Tech earnings pressured the DXY. China's surprise 20 bps cut in the medium-term lending facility helped restore confidence in its economy, benefitting the ringgit. Domestically, stable inflation and solid growth outlook helped attract RM1.1b portfolio funds into the bond market.
