Recent forecasts indicate a complex interplay between the US dollar (USD) and the Malaysian Ringgit (MYR). The USD has experienced a decline, attributed to a risk-positive market sentiment that has diminished its appeal as a safe-haven currency. Initial jobless claims dropping provided some relief, allowing the USD to recover slightly during European trading hours. However, further movement is likely to depend on market risk appetite in the absence of significant American economic data.
Key factors impacting the USD include the upcoming Consumer Price Index report, which is expected to signal a 0.3% rise in core inflation. Such developments could influence Federal Reserve interest rate decisions, which are paramount for the US dollar's strength. Additionally, ongoing US-China trade tensions and global dedollarization efforts pose further risks to the dollar’s valuation, particularly as negotiations are underway that could affect various sectors.
In contrast, the Malaysian Ringgit has been on a stronger footing, reaching a 13-month high amid positive economic signals. The ringgit's appreciation is bolstered by Malaysia’s stable interest rates and favorable GDP growth of 5.2% in Q3 2025, driven by robust domestic consumption and exports. Furthermore, the recent trade agreements secured at the ASEAN Summit have enhanced Malaysia's export prospects, further solidifying the ringgit's strength.
The USD/MYR exchange rate is currently at 90-day lows near 4.1305, which is 1.6% below its 3-month average of 4.1974, having demonstrated stability in a narrow range over the past weeks. This development reflects the strong fundamentals supporting the MYR against the weakening USD.
Furthermore, oil prices, an essential determinant for the MYR, have been trading at $63.34, about 2.8% below their 3-month average. The fluctuation in oil prices has introduced some volatility, but recent trends continue to indicate a challenging environment for the USD while supporting the structural strength of the MYR.
In summary, the current period presents a favorable landscape for the Malaysian Ringgit, bolstered by positive domestic economic indicators, while the US dollar faces headwinds amid shifting market dynamics and geopolitical uncertainties.
