The U.S. Federal Reserve (Fed) has decided to keep its benchmark interest rate at 4.25%-4.5% during its March 19, 2025 meeting while signaling the possibility of two rate cuts later this year. Despite ongoing economic challenges, including trade tariffs and inflationary pressures, the Fed maintains its cautious approach to monetary policy.

The Malaysian ringgit, which was the strongest currency in Asia last year, is now showing signs of weakening amid rising trade tensions. The U.S. has imposed new import tariffs on Chinese goods, impacting Malaysia’s economy and potentially forcing Bank Negara Malaysia to cut interest rates by 0.25%.

Dollar Strengthens as Yen Faces Pressure On Wednesday morning, the USD/JPY pair surged near ¥153.50 following remarks by Kazuo Ueda, Governor of the Bank of Japan (BoJ). Speaking in parliament, Ueda stated that the central bank has no plans to raise interest rates or scale back its stimulus measures anytime soon.

On February 12, 2025, Federal Reserve Chair Jerome Powell testified before the U.S. House Financial Services Committee as part of the Fed’s semiannual monetary policy report. He emphasized that the U.S. economy remains strong, with a low unemployment rate of 4% and inflation still above the Fed’s 2% target. Powell stated that there is no urgent need to cut interest rates at this time.

Consumer prices in the United States rose higher than expected in January, indicating that inflation has shown little sign of slowing down. This has diminished hopes for a near-term interest rate cut.

On February 7, 2025, the United States released its employment report for January, with the following key details:

On February 7, 2025, Statistics Canada reported that the Canadian economy added 76,000 new jobs in January, significantly exceeding analysts' expectations of 25,000 jobs. As a result, the unemployment rate dropped from 6.7% in December to 6.6% in January.

On February 6, 2025, the US Department of Labor reported that initial jobless claims increased by 11,000 to 219,000 for the week ending February 1. This figure was higher than analysts' expectations of 214,000.

On February 6, 2025, the Bank of England (BoE) released its Monetary Policy Report and Monetary Policy Summary. The Monetary Policy Committee (MPC) decided to cut the official bank rate by 0.25% to 4.5%.