Forecasts for MYR to USD
According to recent exchange rate analyst forecasts and currency market updates, the Malaysian ringgit (MYR) has been lifted by gains in oil prices. However, economists still expect the MYR to continue losing value against the US dollar (USD) in the medium term, with a potential target of USD/MYR 5. This could be advantageous for businesses importing from Malaysia.
On the other hand, the USD has been strengthened by sticky inflation and safe-haven flows amid simmering US-China geopolitical tensions. Additionally, the US Federal Reserve Chairman, Jerome Powell, no longer expects a recession and sees rate cuts being evaluated a year from now. However, headwinds for commodity currencies have been created by China's partial removal of import restrictions, which failed to stimulate global economies as expected.
Looking ahead, it is anticipated that the MYR will end 2023 with an exchange rate range of 4.20 to 4.30 per USD. The fundamentals of the Malaysian ringgit remain strong, supported by a potential recovery in the tourism sector, which could narrow the services account deficit and positively impact the currency. Long-term weakness in the MYR may also attract expatriates and high-value foreigners to invest in Malaysia, driven by the relatively cheaper ringgit and lower cost of living compared to neighboring countries.
As for the USD, economists predict that its strength over the past year will eventually reverse in 2023 as the Federal Reserve's interest rate hikes cycle concludes. Furthermore, the US oil consumption and production dynamics, with a significant shortfall primarily imported from Canada, can impact the USD.
In terms of recent price data, the MYR to USD exchange rate is currently at 30-day lows near 0.2166, just 0.6% below its 3-month average of 0.2178. On the other hand, the OIL to USD price has been trading above its 3-month average, indicating a volatile 9.6% increase. Given the MYR's sensitivity to oil price movements, this could impact its value against the USD.
Overall, considering the forecasted trends and recent data, it is advisable for businesses importing from Malaysia to take advantage of the current exchange rate conditions. However, it is crucial to regularly monitor updates from FX analysts and economists to stay informed and make informed decisions regarding international transactions.
