US Dollar/Ringgit To Trade 3.95-4.05 In Near Term -- Apex Securities
KUALA LUMPUR, April 30 (Bernama) -- Apex Securities expects the US dollar/ringgit pair to trade within the 3.95-4.05 range in the near term.
In a research note today, the brokerage said growing expectations of a more neutral US Federal Reserve (Fed) stance, alongside safe-haven demand amid geopolitical tensions, should keep the US dollar supported in the near term.
It added that the US dollar index has risen 1.4 per cent to 98.9 since the onset of the West Asia conflict.
“We expect the Fed to remain on hold throughout 2026, following one 25-basis-point cut previously. This is broadly in line with Fed funds futures, which are pricing in no cut in 2026,” said Apex Securities.
In its third meeting this year, the Federal Open Market Committee kept the policy rate at 3.50–3.75 per cent, with one dissenter favouring a 25-basis-point cut. Notably, three members opposed retaining the easing bias in the statement.
“We concur with the Fed’s view that the US economy remains resilient, supported by the ongoing AI investment upcycle and sustained data centre demand,” said Apex Securities.
It added that the wealth effect from resilient equity markets should also continue to underpin household spending, and the Fed’s focus might shift towards containing inflation as reflected in the increasingly cautious tone from the Fed committee.
Closer to home, Apex Securities maintained its view that Bank Negara Malaysia will keep the overnight policy rate unchanged at 2.75 per cent throughout 2026 to preserve growth.
“The extent of spillovers from elevated crude oil prices into broader inflation, alongside the strength of domestic demand, will remain key policy considerations,” it added.
As for the Fed policy outlook, Kenanga Investment Bank Bhd (Kenanga IB) maintains its view for two cuts in the fourth quarter of 2026, despite geopolitical and energy-driven inflation risks that have clearly raised the bar for easing.
Its baseline was that softer labour market conditions, weaker real incomes, and eventual geopolitical de-escalation in the third quarter of 2026 should reverse the crude geopolitical premium and lower inflation into 2027, it said.
“While risks of delayed cuts have increased, we still see the next move as more likely a cut than a hike,” it added.
Kenanga IB said that safe-haven flows and reduced expectations of Fed rate cuts should support the US dollar in the near term.
“Nevertheless, as markets converge towards our expectation of a late-2026 easing and geopolitical premiums eventually unwinding, we continue to expect a broader US dollar softness into year-end,” it added.
-- BERNAMA