THE ringgit held broadly firm on Tuesday, with the US dollar trading at approximately RM4.0789, as investors reassessed the outlook for US monetary policy following weaker-than-expected employment data and a continued decline in global oil prices.
The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, hovered around 100.85 after opening the week close to the 101 level. Although the index edged higher at the start of the week, it remained near a three-week low after recording its steepest weekly decline since April.
The dollar's recent weakness followed the June US non-farm payrolls report, which showed a marked slowdown in job growth and prompted investors to scale back expectations of further Federal Reserve interest rate increases this year.
Financial markets are now pricing a 56 per cent probability of a Federal Reserve rate hike in September, down from approximately 64 per cent before the release of the employment data, signalling a softer outlook for US monetary policy.
Investor attention is now firmly focused on the release of the Federal Open Market Committee (FOMC) minutes later this week, which could provide further insight into policymakers' assessment of inflation, economic growth and the timing of any future interest rate decisions.
Despite the broader weakness in the greenback, the US dollar posted its strongest gains against the Japanese yen on Monday, with Japan's currency remaining close to a 40-year low as traders continued to watch for the possibility of intervention by Japanese authorities.
In commodity markets, Brent crude traded below US$69 a barrel on Tuesday, hovering near its lowest level in more than four months as improving supply conditions outweighed lingering geopolitical risks in the Middle East.
Maritime traffic through the Strait of Hormuz continued to normalise, with reports indicating that at least eight Japan-linked vessels, including five very large crude carriers capable of transporting around two million barrels of oil each, had successfully exited the strategic waterway via routes near Iran.
Further pressure on oil prices came after Saudi Aramco cut the official selling price of its flagship Arab Light crude for Asian buyers by US$11 per barrel for next month, setting the grade at a US$1.50 discount to the regional benchmark.
The move reflected softer market conditions and marked only the third occasion in recent decades that the company has offered the benchmark crude at a discount, following similar pricing during the oil market downturns of 2020 and 2015.
The price reduction followed an agreement by OPEC+ producers, led by Saudi Arabia, to increase production quotas next month, reinforcing expectations of stronger global supply and contributing to a more favourable inflation outlook for the global economy. - July 7, 2026
