The recent forecasts for the SGD to MYR exchange rate reflect a challenging environment influenced by escalating trade tensions. Analysts note that the backdrop of U.S. President Donald Trump's tariffs on Singapore (10%) and Malaysia (24%) is likely to impact both currencies negatively. This trade friction has led to increased uncertainty and risk aversion in the market, contributing to a bearish sentiment for emerging Asian currencies.
The SGD has remained reasonably stable, trading at 3.2975 against the MYR, just below its three-month average. The trading range has been relatively narrow, fluctuating within a 2.6% band from 3.2593 to 3.3428. However, the tariffs and the broader trade war fears have dampened the optimistic outlook for the Singaporean dollar, particularly given its dependency on U.S. trade, which accounts for about 15% of its total trade volume.
In parallel, the MYR faces significant challenges as it grapples with not only elevated tariffs but also the general erosion of investor confidence in the region due to risks associated with a potential global trade war. With ASEAN currencies experiencing a downward trend, the Malaysian ringgit is no exception, reflecting broader regional weaknesses.
Adding to the complexity, oil prices—an essential driver for the Malaysian economy—have shown some recent strength, trading at 68.44 USD per barrel, slightly above its three-month average. However, volatility in oil prices, which has spanned a considerable range of 31.1% from 60.14 to 78.85, creates further uncertainty for the MYR.
In summary, while the SGD to MYR exchange rate has displayed stability recently, underlying conditions driven by tariffs and fluctuating oil prices signal potential volatility ahead. Analysts recommend that individuals and businesses engage in proactive currency market strategies to mitigate risks associated with these developments.