- Malaysia Ringgit (MYR) rises to its highest level since April 2021
- The currency is boosted by Chinese stimulus news
- US Dollar (USD) rises against major peers
- Fed Chair Powell is due to speak
The US Dollar Malaysian Ringgit (USD/MYR) exchange rate is edging higher, giving back earlier losses and after losses from last week. The pair fell 1.8%% last week, settling on Friday at 4.1220. At 15:00 UTC, USD/MYR trades +0.04% at 4.1235 and is in a range of 4.0965 to 4.1275.
Malaysian ringgit climbed in early trade on Monday reaching its highest level in more than three years against the US dollar after additional Chinese stimulus measures over the weekend boosted sentiment for regional currencies and injected a sharp rally into Chinese stocks.
China is the biggest trading partner for most of the region, which explains how vast stimulus measures could boost other currencies in the region.
The Malaysian currency has had a very strong quarter this quarter, rising around 12.6%, making it the best-performing currency of the year among EM currencies thanks to factors such as economic growth, political stability, and forest investors in place.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 100.49 at the time of writing, up 0.07% after four straight weeks of losses.
The US dollar was inching higher at the start of the week but remains near a 14-month low amid expectations that the Federal Reserve will continue to cut interest rates.
Earlier in September, the Fed cut rates by a larger 50 basis points, and the market is pricing in the possibility that the Fed could cut rates by a further 50 basis points in November.
According to the Fed watch tool, the markets are pricing in a 40% probability of an outsized rate cut, down from 60% last week.
Attention is turning to the Federal Reserve chair Jerome Powell who is due to speak later today and could provide further clues on whether the Fed will opt for an outsized move.
While the US economic calendar is quiet today, this week is a busy week on the data front. The US ISM services on manufacturing figures are in focus, as are the US non-farm payroll figures on Friday. The data could provide more clues about whether the Fed will be cut by 50 basis points or not.
