The recent exchange rate forecasts for the Malaysian Ringgit (MYR) against the Thai Baht (THB) reflect increasing uncertainty in the context of escalating trade tensions initiated by U.S. President Donald Trump's tariff announcements. The imposition of a 24% tariff on Malaysian goods, coupled with a 36% rate on Thai imports, has contributed to a negative outlook for emerging Asian currencies. Analysts suggest that the backlash against these tariffs is likely to result in a decline in regional risk appetite, adversely affecting currencies including the MYR and THB.
Data indicate that the MYR to THB exchange rate currently stands at 7.6738, which closely aligns with its three-month average, indicating stability in the midst of regional turmoil, despite having fluctuated within a range of 4.4% from 7.4980 to 7.8265. However, the broader trend shows that regional currencies have experienced a decline, with both the Thai Baht and South Korean Won sliding approximately 2% over the past week.
The ongoing trade war narrative has raised concerns about the economic growth of Malaysia and Thailand, especially after several central banks in the region chose to cut interest rates as a means of supporting economic performance. Experts believe that continued tariff pressures could exacerbate these economic challenges.
Additionally, fluctuations in oil prices can have an impact on the MYR, considering Malaysia's status as an oil producer. The recent oil price data reports OIL to USD at 67.77, just above its three-month average of 66.99, within a volatile range of 31.1% from 60.14 to 78.85. Economists point out that sustained higher oil prices can provide a necessary buffer for the MYR, fostering resilience against external shocks.
In summary, analysts recommend caution given the high volatility in both the MYR and THB amidst the backdrop of heightened trade tensions and fluctuating oil markets. It may be prudent for individuals and businesses engaged in international transactions to monitor these developments closely to optimize their foreign exchange strategies.