Recent analysis of the HKD to MYR exchange rate indicates a complex interplay of local and global factors influencing market conditions. As of August 12, 2025, the HKD trades at 0.5384 MYR, just below its three-month average, showing relative stability within a narrow range of 0.5347 to 0.5498. Analysts suggest that this stability may be attributed to the ongoing influence of the US Federal Reserve's interest rate decisions. The Fed has maintained interest rates at 4.25-4.5%, with anticipated cuts potentially affecting the strength of the US dollar, indirectly benefiting the MYR.
Important factors contributing to the HKD's dynamics include substantial capital inflows into Hong Kong, triggered by recent interventions by the Hong Kong Monetary Authority. The strong-side Convertibility Undertaking highlighted how these inflows have influenced interest rates, pushing them down to near three-year lows. The interest rate differential that has emerged due to carry trades, where investors borrow in HKD to invest in higher-yielding USD instruments, also plays a significant role, leading to the HKD trading closely to its weak-side Convertibility Undertaking level of 7.85.
Conversely, the MYR faces pressures from external tariffs imposed by the US on Malaysian goods, which have raised concerns about the currency's stability. However, the anticipated weakening of the US dollar due to potential Fed rate cuts could mitigate some adverse impacts on the MYR. Furthermore, as a major oil exporter, Malaysia's economy is closely tied to global oil prices. Recent market data indicate that oil is currently trading at 65.85 USD per barrel, approximately 3.8% below its three-month average, causing fluctuations that can directly affect the MYR.
FDI inflows and domestic economic policies that aim to boost efficiency are positives for the MYR, although the currency's performance remains vulnerable to international market fluctuations. The overall outlook suggests that both currencies will continue to react to fiscal policies and market events, with economists advising close monitoring of economic indicators to make informed decisions regarding currency exchanges and investments.
