USD/MYR settles below 1-week high, posts weekly gain

The USD/MYR currency pair settled below Friday’s high of 4.3220, its strongest level since May 2nd, in the wake of the Federal Reserve’s and the Central Bank of Malaysia’s policy decisions.

The Fed left its federal funds rate target range intact at 4.25%-4.50% for a third straight meeting in May, in line with market consensus.

The US central bank has adopted a wait-and-see approach amid concerns that the tariffs could push inflation higher and slow GDP growth.

At the press conference after the FOMC meeting, Fed Chair Jerome Powell noted it was too early to determine whether inflation or unemployment would emerge as the bigger concern and the central bank did not have to rush into adjusting interest rates.

In the meantime, the Central Bank of Malaysia maintained its benchmark interest rate at 3% for an 11th straight policy meeting in May, in line with market expectations.

The central bank said that the current policy stance was appropriate in the wake of its latest assessment of inflation and GDP growth prospects.

Headline and core inflation averaged 1.5% and 1.9%, respectively, in Q1 of 2025, with overall inflation anticipated to stay manageable for the remainder of the year amid moderate global costs and subdued domestic demand pressures.

The exotic Forex pair gained 0.85% for the week.