Recent developments for the Hong Kong Dollar (HKD) and Malaysian Ringgit (MYR) reveal a complex currency landscape influenced by interest rate changes, geopolitical factors, and commodity price movements.
The HKD has recently experienced downward pressure following an interest rate cut by the Hong Kong Monetary Authority (HKMA) on September 18, 2025, which brought the rate down to 4.50%. This adjustment aligns with the U.S. Federal Reserve's strategy, suggesting a cautious response to global economic conditions. Analysts noted that this rate cut may make the HKD less attractive for investors, potentially leading to a depreciation against other currencies. Additionally, the HKMA's intervention in May 2025 to sell HKD in the currency market supports the ongoing commitment to maintain the currency's peg to the U.S. dollar, despite rising geopolitical tensions.
Conversely, the MYR has also been affected by significant economic events. The Bank Negara Malaysia (BNM) cut its Overnight Policy Rate to 2.75% on July 9, marking its first reduction in five years. This move reflects concerns over economic growth, particularly in light of ongoing trade tensions between Malaysia and the U.S. The imposition of tariffs on Malaysian exports may weigh on the currency, leading analysts to predict increased volatility for the USD/MYR pair. The diversified nature of Malaysia's economy may provide some resilience, as noted by BNM, but the potential for further economic risks cannot be overlooked.
Recent HKDMYR data indicates that the exchange rate currently stands at 0.5438, just 0.5% above its three-month average of 0.5409, indicating a stable trading range, with fluctuations between 0.5360 and 0.5450. While this steadiness could suggest a temporary equilibrium, broader market conditions may still impact future rate movements.
Adding to this context, oil prices have shown volatility, with Brent Crude OIL priced at USD 61.29, sitting 8.5% below its three-month average. The significant fluctuations in oil pricing, trading in a volatile 20.2% range, directly influence MYR given Malaysia's status as a major oil exporter. A decline in oil prices typically exerts downward pressure on the MYR, further complicating the currency dynamics.
Market analysts will continue to monitor these developments closely, as shifts in interest rates, geopolitical tensions, and oil price volatility all contribute to the future trajectory of both the HKD and MYR exchange rates.
