KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
What’s happening
The US dollar is coming under renewed pressure in early 2026 as investors reassess political, monetary and geopolitical risks tied to the US. The greenback is on track for its sharpest three-day drop since April 2025, when tariff threats triggered a broad selloff in US assets.
Under Donald Trump, policy unpredictability has resurfaced — from tariff threats and geopolitical brinkmanship to attacks on Federal Reserve independence — prompting investors to rethink long-held assumptions about dollar stability.
Why the dollar is under fire
Several forces are converging:
Political risk premium is rising: erratic trade threats, diplomatic tensions, and renewed talk of a US government shutdown
Monetary policy divergence: markets expect the Fed to cut rates at least twice this year, while other central banks pause or even tighten
Fed leadership uncertainty: Chair Jerome Powell is set to step down in May, with speculation that a more dovish successor could weaken policy credibility
Safe-haven rotation: gold has surged to record highs, while volatility remains elevated in bonds and FX
As one strategist put it, this is not yet a full “Sell America” trade, but fundamentals are turning against the dollar faster than expected.
Markets are quietly diversifying
Global investors are increasingly rebalancing away from US assets after years of heavy concentration. Since Trump’s return:
The S&P 500 is up ~15%
South Korea’s Kospi has surged ~95%
Japan’s Nikkei is up ~40%
China’s main index has gained ~30%
This relative underperformance is encouraging asset managers to diversify currency and equity exposure, weighing further on the dollar.
Key risk signals to watch
Gold at record highs → demand for non-dollar safe havens
Fragile bond sentiment, amplified by Japanese government bond volatility and potential spillover into Treasuries
Yen dynamics, including suspected coordination between the Bank of Japan and the New York Fed
Geopolitics over economics: tariffs and diplomacy are increasingly driving FX, not growth alone
Bottom line
The US dollar is losing its policy premium. While the move is not yet disorderly, political uncertainty, Fed credibility concerns and global diversification trends are steadily eroding confidence. Unless policy volatility eases, the dollar is likely to remain structurally pressured rather than cyclically weak in 2026.
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