Ringgit Breaking 4.20 Hinges On Upcoming Economic Data
After a brief dip to 4.26 against the US dollar last Friday, the Malaysian Ringgit (MYR) showed resilience this week, trading within the expected 4.23–4.25 range. This recovery was partly attributed to a subdued US Dollar Index (DXY), as reported by Kenanga Research.
The US dollar experienced initial pressure following increased US tariffs on steel and aluminum, coupled with threats of a 'revenge tax' from President Donald Trump. Further weakness came from a softer ISM manufacturing print and growing fiscal concerns. However, the greenback later rebounded on stronger JOLTs job openings data and renewed optimism surrounding potential trade talks between the US and China. Despite this rebound, softer ADP private payroll figures and rising jobless claims have signaled potential cracks in the US labor market.
Globally, Thursday's European Central Bank (ECB) rate cut had minimal impact on bolstering the USD. The Euro managed to hold its gains amid indications that further easing might be paused soon. Market attention now shifts to tonight's Non-Farm Payrolls (NFP) data. A figure below 100,000 new jobs could intensify recession fears and strengthen the case for a US Federal Reserve rate cut. However, markets are likely to await next week's core inflation data, which is anticipated to show a 0.3% month-over-month increase, before making significant moves.
Looking ahead, Kenanga Research notes lingering concerns about renewed trade and bond market volatility once the 90-day US reciprocal tariffs pause concludes in July. The trajectory of US-China negotiations will be critical. A breakthrough in these talks could offer the US dollar short-term support, although fiscal-driven term premiums might cap any substantial gains.
Domestically, the Ringgit's performance will hinge on upcoming economic indicators. If industrial production (IPI) and retail sales data point to continued economic resilience in Malaysia, the Ringgit could appreciate further. Kenanga Research suggests the Ringgit could potentially test the 4.21–4.24 per US dollar range next week.
Technically, the USDMYR currency pair remains neutral, trading close to its 5-day Exponential Moving Average (EMA) of 4.24. Near-term direction is expected to be guided by trade-related headlines, with immediate support identified at 4.22 and resistance at 4.25. USD GBP EUR JPY100 CHF AUD CAD SGD HKD100 3 Jun 2025 4.2390 5.7426 4.8509 2.9704 5.1885 2.7522 3.0894 3.2982 54.0382 4 Jun 2025 4.2490 5.7474 4.8366 2.9508 5.1597 2.7451 3.0983 3.2947 54.1636 5 Jun 2025 4.2325 5.7395 4.8375 2.9667 5.1764 2.7518 3.0956 3.2942 53.9509 6 Jun 2025 4.2250 5.7367 4.8376 2.9395 5.1512 2.7503 3.0916 3.2851 53.8508 Related
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