**USD/MYR Declines After Brief Rally, Faces Weekly Loss Amid Dovish Fed Tone and Strong Ringgit Fundamentals**
*Original Author: TradingPedia (July 19, 2025). Content expanded and updated for clarity and depth.*
Following a brief surge to a two-and-a-half-week high, the US dollar (USD) relinquished gains against the Malaysian ringgit (MYR) late this week, closing the period with a net loss amid renewed selling pressure and changing market dynamics. Despite early-week bullish sentiment supported by rising US Treasury yields and hawkish Federal Reserve language, investor focus shifted toward local market fundamentals and global macroeconomic cues that ultimately favored the ringgit.
This article provides a deep dive into the recent USD/MYR movements, the key drivers behind its retreat, and future expectations based on current economic trends.
## Overview of USD/MYR Weekly Movement
– **Opening Level**: USD/MYR began the week trading near 4.6730.
– **Weekly High**: Peaked at 4.6880, marking its strongest level since late June.
– **Closing Level**: Closed the week at approximately 4.6650.
– **Performance**: Registered a weekly decline of about 0.17 percent.
The pair’s inability to hold above the 4.6800 threshold signifies a lack of follow-through currency demand for the USD, especially in light of developing monetary and economic conditions in the US and Malaysia.
## Federal Reserve’s Dovish Shift Pacifies Dollar Bulls
One of the most significant factors affecting USD/MYR during the week was the shift in tone from the US Federal Reserve. With inflation data tapering and job market growth appearing to stabilize, Fed Chair Jerome Powell signaled a more cautious stance on further rate hikes in his midweek Senate testimony.
### Key Developments from the Fed:
– **Powell’s Statement**: Stressed that interest rates are likely near peak levels unless inflation rebounds significantly.
– **Rate Expectations**: Market-implied probability of a September rate cut increased modestly.
– **Yields Cooling Off**: The 10-year US Treasury yield fell from 4.32 percent early in the week to 4.26 percent by Friday.
A less aggressive Fed outlook typically weighs on the USD as foreign exchange markets adjust to thinner interest rate differentials between US and Asian economies.
## Malaysia’s Economic Landscape Supports Ringgit
While the greenback witnessed a decline in fresh buying, the ringgit simultaneously received support from Malaysia’s improving macroeconomic indicators and active central bank policy.
### Notable Domestic Trends in Malaysia:
– **Stronger GDP Forecast**: Bank Negara Malaysia (BNM) maintained its 2025 economic growth target of 4.3 percent amid accelerating private consumption and export recovery.
– **Stable Monetary Policy**: BNM held its overnight policy rate (OPR) steady at 3.00 percent during its latest meeting, signaling confidence in the country’s inflation management.
– **Solid Trade Numbers**: June’s exports grew 7.2 percent year-over-year, outperforming expectations due to stronger demand for electrical and electronics (E&E) products.
### Foreign Investor Flows:
– Increased confidence in Malaysia’s economic outlook prompted continued foreign portfolio inflows, particularly into government bonds and equities, further underpinning support for the ringgit.
## Technical Analysis: Rejection at Resistance, Downward Pressure Restored
From a technical standpoint, the USD/MYR pair failed to sustain a breakout above short-term resistance levels, leading to a corrective move into negative territory.
### Key Technical Observations:
– **Resistance Zone**: 4.6850 to 4.6900 continues to present significant supply, rejecting upward momentum for the third time in a month.
– **Support Levels**: Immediate support lies at 4.6550, with a stronger base seen at 4.6400.
– **Moving Averages**: The 20-day and
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