USD/MYR: Ringgit mostly steady even as Malaysia CPI picks up

The USD/MYR currency pair remained confined within a narrow range on Friday, following the release of Malaysian CPI data for October.

Meanwhile, investors continued to weigh geopolitical situation as Russia lowered its threshold for using nuclear weapons and launched a hypersonic intermediate-range ballistic missile on Ukrainian territory.

Concerns over further escalation of the Russia-Ukraine conflict have kept safe haven assets, including the US Dollar, supported.

The greenback has also drawn support on the back of expectations that US President-elect Donald Trump’s policies on tariffs, immigration and taxes could drive inflation higher and restrict the Federal Reserve’s ability to ease monetary policy.

Markets are now pricing in about a 60% chance of a 25 basis point rate cut at the Fed’s December policy meeting. Some market players are even betting on a temporary pause in the Fed’s easing cycle.

On the macro data front, annual consumer inflation in Malaysia was reported to have accelerated to 1.9% in October from a five-month low of 1.8% in September. Most components of the CPI continued to register price increases.

Malaysia’s annual core CPI inflation, which excludes fresh food items and administered costs, remained stable at 1.8% in October, a six-month low.

Malaysia’s Ringgit showed a rather muted reaction to the latest CPI inflation report.

“Inflation is fairly well contained in Malaysia. So we do not expect there to be any immediate implications for the currency or on monetary policy,” Khoon Goh, head of Asia research at ANZ, was quoted as saying by Reuters.

The Central Bank of Malaysia left its overnight policy rate without change at 3% for the ninth straight policy meeting in November.

With regard to inflation, the central bank said the rate would likely remain manageable in 2025 due to easing global costs and the lack of significant domestic demand pressures.

Currency Pair Performance

The USD/MYR currency pair was last inching up 0.03% on the day to trade at 4.4615, while moving within tight daily range.

The exotic Forex pair has remained within striking distance of a 14-week high of 4.4880.