The USD/MYR currency pair traded in proximity to a 1-month high of 3.9510 on Wednesday ahead of the outcome of the Central Bank of Malaysia’s policy meeting and as the US Dollar held gains in light of rising energy costs.
Global oil and gas prices have surged as the attacks on Iran disrupted energy exports from the Middle East.
And, Tehran’s retaliatory strikes on ships and energy facilities have closed navigation in the Gulf and led to production stoppages from Qatar to Iraq.
Concerns that rising energy costs could reignite inflation have prompted a reassessment of the Federal Reserve’s monetary policy path.
“We’re still in a scenario where dollar selloffs are probably going to be short-lived and probably bought into because there is still a lot of negativity priced into most currencies, which are sensitive to energy prices,” CIBC Capital Markets head of G10 FX strategy Jeremy Stretch was quoted as saying by Reuters.
Meanwhile, the Central Bank of Malaysia is anticipated to maintain its benchmark interest rate at 2.75% at its March 5th meeting.
Policy makers had said headline inflation was expected to remain moderate in 2026 amid continued easing in global cost pressures, while core inflation is expected to remain stable and close to its long-term average.
The USD/MYR currency pair was last down 0.09% on the day to trade at 3.9395.
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