The ringgit traded in a narrow range to close Thursday at 4.033 against the US dollar, recovering slightly from last week’s 4.039 finish. The move follows a mid-week rally to 4.026 triggered by a brief retreat in US Treasury yields and softer global crude prices.
According to research firm Kenanga Investment Bank, the currency’s initial advance was sparked by intervention measures from US Treasury Secretary Scott Bessent, which pushed long-end US bond yields lower on Wednesday. However, the ringgit retraced those gains toward 4.033 on Thursday as a marginal uptick in domestic headline inflation prompted investors to trim USD short positions ahead of a major policy address by Federal Reserve Chair Kevin Warsh.
Kenanga highlighted that falling long-end US yields alongside subdued domestic household spending support the view that broader fiscal and growth concerns will limit any significant upside for the greenback.
At the same time, cautious market sentiment surrounding potential policy tightening by both the Federal Reserve and the Bank of Japan (BoJ) has kept traders hesitant to push the ringgit significantly higher.
Markets are currently bracing for a cluster of macro events:
Federal Reserve Chair Kevin Warsh’s speech serves as the immediate market catalyst. Kenanga noted that a credible framework from Warsh could compress term premia, whereas any policy ambiguity risks spiking long-end yields and boosting the US dollar.
Upcoming non-farm payrolls (consensus: +60.0k following July’s -23.0k contraction) and JOLTS job openings (expected at 7.30m) will heavily influence pricing ahead of the September FOMC meeting.
Investors are monitoring geopolitical developments between the US and Iran, specifically reports regarding preparations to reopen the Strait of Hormuz, which could alleviate oil supply disruption concerns.
Bank Negara Malaysia (BNM) is widely expected to hold the Overnight Policy Rate (OPR) steady at 2.75%, leaving local currency movements largely dictated by global rate differentials and USD positioning.
Kenanga expects the Federal Reserve to hold benchmark rates steady in September, forecasting the first rate cut in 2Q27. This contrasts with current market pricing, which factors in a 34% chance of a September hike and a move fully priced by December.
While tightening by the BoJ provides structural support to the Japanese yen, the USD leg remains the primary driver for the USD/MYR pair.
USD/MYR retains a bearish short-term bias while trading below its 5-day Exponential Moving Average (EMA-5) at 4.035.
The 7-day Relative Strength Index (RSI-7) sits at 22.3, indicating deeply oversold conditions and increasing the likelihood of a temporary technical bounce.
Immediate resistance is pegged at 4.039. A weak US payrolls report could trigger a retest of the 4.020 support, while stronger-than-expected US jobs data or hawkish commentary from Warsh could lift USD/MYR toward 4.050.
