How did weaker DXY after FOMC minutes lift the ringgit?

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The ringgit strengthened as the US dollar weakened following divided views among Federal Reserve officials on interest rates.

The Malaysian ringgit opened on a firmer note against the US dollar, trading at 4.0730/0800 on Thursday morning, an improvement from its previous close. This appreciation was directly linked to a softening of the US dollar, which occurred after the release of minutes from the US Federal Open Market Committee (FOMC) meeting. The US Dollar Index (DXY) saw a decline as a consequence of the divided sentiment among Federal Reserve officials regarding the future direction of interest rates.
Divided Fed Stance on Interest Rates

Minutes from the FOMC meeting indicated that Federal Reserve officials remained split on whether to maintain current interest rates or implement further hikes. The discussions explicitly excluded any consideration of interest rate cuts, underscoring a persistent focus on curbing inflation. This divergence in opinion among policymakers contributed to the weakening of the US dollar.
Restrictive Rate View and Dollar Softening

Several Federal Reserve officials expressed the view that the prevailing federal funds rate, set between 3.50 per cent and 3.75 per cent, was already restrictive. This assessment played a significant role in the dollar's depreciation. The softening of the US dollar created an environment where other currencies, including Asian ones like the ringgit, were afforded greater opportunity to strengthen.
Impact on Asian Currencies and the Ringgit

The decline in the US dollar's strength provided Asian currencies with the necessary room to appreciate. Consequently, the ringgit, along with other regional currencies, experienced a positive movement against the greenback. While the ringgit saw gains against the US dollar, its performance against other major currencies varied, with some movements showing a decline and others an increase.

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How did weaker DXY after FOMC minutes lift the ringgit?

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