Forecasts for MYR to CNY
The exchange rate forecasts for the Malaysian Ringgit (MYR) against the Chinese Yuan (CNY) suggest a challenging outlook amid escalating trade tensions and economic pressures. Following the recent announcement by U.S. President Donald Trump of a significant 24% tariff on Malaysian imports, analysts indicate that Malaysia is becoming increasingly vulnerable to external economic shocks. While Malaysia has chosen not to retaliate, it is actively coordinating a regional response to demonstrate solidarity among Southeast Asian nations affected by these tariffs. This response, however, has not eliminated the market's concerns about the MYR's immediate stability.
The MYR to CNY exchange rate has recently hit 14-day lows near 1.6914, representing a 1.3% rise above its three-month average of 1.6699. This suggests that traders are currently pricing in both local economic factors and international developments. The currency pair has fluctuated within a range of 6.7%, reinforcing the belief among market participants that significant volatility may persist as trade tensions evolve. The ongoing threat of U.S. tariffs is dampening sentiment in emerging Asian currencies, leading to broader regional declines.
Conversely, the CNY is also under pressure, especially as the yuan has recently traded past the critical level of 7.3 per dollar. Analysts attribute this depreciation to China's sluggish economic recovery from the Covid-19 pandemic and the subsequent impacts of U.S. tariffs. The People's Bank of China (PBOC) is perceived as potentially easing its historically stable currency policy to combat these external pressures, raising concerns among investors about a potential further weakening of the yuan. The Chinese government's efforts to stimulate growth, particularly in troubled sectors like real estate, may not be sufficient to stabilize the currency amid shrinking business investment and rising youth unemployment.
In addition, fluctuations in oil prices significantly influence the MYR, given Malaysia's status as a major oil exporter. The recent uptick in oil prices, with oil trading around $74.23—10.9% above its three-month average—could present some support for the MYR. However, analysts caution that continued volatility in oil prices may amplify exchange rate fluctuations, as local economic conditions remain tied closely to global oil market dynamics.
Overall, market participants are advised to monitor both the geopolitical landscape and commodity price trends closely, as these factors will considerably affect the MYR/CNY outlook in the near term.