The Malaysian ringgit held steady within a tight range of 4.705 to 4.718 against the USD over the past week, influenced by mixed US economic data. Despite weaker US housing figures, the USD index (DXY) strengthened above 106.0 due to Euro and GBP depreciation amid French political uncertainty and expectations of a BoE rate cut.
Looking ahead, the market focus turns to the US core PCE data, anticipated at 0.1% MoM, which could reinforce dovish sentiments on Fed rate cuts in September. A potential easing in the DXY might favour the ringgit, yet heightened Euro risk premiums preceding the French parliamentary elections could sustain USD safe-haven demand.
The upcoming US economic indicators, including manufacturing PMI, June jobs report, Fed Chair Powell’s speech, and FOMC minutes, are critical. Signs of US economic softness could prompt the ringgit to test the 4.70/USD level. However, the USD’s role as a hedge amidst global political uncertainties suggests continued cautious market sentiment.
