The USD to MYR exchange rate has recently shown fluctuations influenced by various economic and geopolitical factors. Currently, the USD is trading at around 4.2360 MYR, which is approximately 1.2% below its three-month average of 4.2886. Analysts note that the USD's strength is buoyed by safe-haven flows and diminishing expectations for Federal Reserve interest rate cuts, which have led to a rally in the dollar as market participants respond to trade deal hopes from the U.S. administration.
However, the Malaysian ringgit (MYR) faces challenges primarily from the new 24% tariffs imposed by the U.S. on Malaysian goods, as recently announced by President Trump. This development is part of a broader strategy impacting global trade relations and has sparked concerns among regional economies. Malaysian authorities have chosen not to retaliate, and there are ongoing discussions about a coordinated regional response to these tariffs, as indicated by Prime Minister Anwar Ibrahim.
The recent tariff announcements have contributed to a bearish sentiment towards emerging Asian currencies, including the MYR, as market risk appetite diminishes amid fears of a widening trade war. Over the past week, the MYR's performance has been similar to that of its regional peers, which have seen declines due to heightened trade tensions.
In addition, the price of Brent Crude oil continues to exert influence on the MYR, given Malaysia's status as a major oil exporter. Recent data shows oil prices at $69.58 per barrel, about 4.1% above the three-month average, which could provide some support for the MYR. However, the volatility in oil prices—with a significant range between $60.14 to $78.85—creates uncertainty that can affect the MYR's stability against the dollar.
Looking ahead, forecast analysts suggest that any disappointment surrounding U.S. trade deals could lead to resistance in the dollar's ascent, while the MYR's trajectory may depend heavily on ongoing trade negotiations and global oil price trends. As both currencies respond dynamically to these external pressures, businesses and individuals should monitor these developments closely to optimize their international transactions.