Malaysian Ringgit: Growth supports range against US Dollar – Commerzbank

FXStreet Insights Team FXStreet

Commerzbank’s Dr. Henry Hao and Moses Lim report that Malaysia’s stronger-than-expected Q2 Gross Domestic Product (GDP) growth and subdued inflation support an unchanged policy rate of 2.75%. USD/MYR has remained within a 4.05–4.10 range, recently edging higher alongside crude oil prices. The analysts see resilient domestic demand and AI-related exports supporting growth, while supply-chain disruptions and higher commodity prices remain key downside risks.

Ringgit supported but risks rising

"The advance estimate for Q2 GDP surprised on the upside, rising 5.8% yoy (Bloomberg consensus: 5.2%) vs 5.4% in Q1."

"The economy grew 5.6% in H1, exceeding the government’s full-year forecast of 4-5%. While growth is expected to remain resilient due to firm domestic demand and strong AI-related exports, downside risks persist from continued supply chain disruptions and higher commodity prices stemming from the Middle East conflict."

"On monetary policy, Bank Negara Malaysia (BNM) is expected to leave the policy rate steady at 2.75% for the rest of the year."

"Given the tame inflationary backdrop and resilient growth momentum, there is little need for BNM to tweak monetary policy. A neutral stance also preserves policy space for BNM to react to two-sided risks to growth or inflation."

"In FX, USD/MYR rose 0.6% to 4.10 last Friday and over the week, tracking higher crude prices. The pair has remained within the 4.05–4.10 range since late June, supported by firm exports and sustained portfolio inflows."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold bulls seem hesitant below $4,500 amid modest USD bounce ahead of US NFP

Gold remains on the defensive below the $4,500 mark through the Asian session, snapping a two-day winning streak amid a modest US Dollar uptick. The commodity, however, remains close to the weekly high, which it touched the previous day, as traders keenly await the release of the closely watched US monthly employment details. The popularly known US Nonfarm Payrolls (NFP) report will provide more cues about the Fed's policy path amid receding bets of a September rate hike.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

US August Nonfarm Payrolls expected to rebound to 56K after July slump

The US Bureau of Labor Statistics (BLS) is set to release the Nonfarm Payrolls (NFP) data for August. Investors expect NFP to rise by 56K in August following July’s unexpected print of -23K.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.