MYR Weakness Shows Signs of Reversal Amid Easing Pressure

The Malaysian Ringgit weakened on Thursday in Asian session trading due to a firmer US Dollar and higher US Treasury yields following the FOMC. This caused USD/MYR to briefly trade above 4.10, but the move was orderly without any signs of Malaysia-specific stress.

However, some pressure eased overnight as the US Dollar and US Treasury yields retreated, while oil prices also pulled back. This may lead to cautious MYR trading if US yields and the Dollar rise again, according to Christopher Wong at OCBC.

Despite this, Wong sees room for recent weakness in the Ringgit to reverse as post-Fed rate moves settle and domestic fundamentals remain supportive.