Malaysian ringgit (MYR) Market Update
The Malaysian Ringgit (MYR) is facing renewed pressure in the foreign exchange market following U.S. President Donald Trump's announcement of a 24% tariff on imports from Malaysia. Analysts suggest that this move is part of the broader escalation in a trade war that has already affected market sentiment regarding emerging Asian currencies. The overall outlook for the MYR has turned bearish, coinciding with a broader regional decline in currencies such as the Thai baht and South Korean won, which have both experienced declines of around 2% in recent days.
Recent trading indicators show that the MYR is at 7-day lows against the U.S. dollar, currently positioned at 0.2325. This represents a 2.5% increase over its 3-month average of 0.2269, while the MYR has fluctuated within a stable range of 6.8%, between 0.2227 and 0.2378. Similarly, the MYR against the Euro is also at 7-day lows near 0.2066, (only 0.7% below its 3-month average of 0.208), demonstrating volatility, with trading in a 9.8% range from 0.1988 to 0.2182.
Conversely, the MYR's performance against the British pound is also notable, trading at 0.1747—just below its 3-month average—and reflecting stable trading conditions within a 6.6% range from 0.1705 to 0.1817. Conversely, against the Japanese yen, the MYR is notably stronger at 33.80, emerging 1.1% above its 3-month average of 33.44, with fluctuations contained within a 7.3% range.
Furthermore, the ongoing trade tensions come at a time when oil prices are experiencing volatility, which could impact the Malaysian economy due to its reliance on oil exports. Currently, oil is trading at 7-day highs near 63.91, though it remains 8.1% lower than its 3-month average of 69.57. This indicates a highly volatile environment, as the oil price has varied widely, reflecting a 28% trading range from 60.14 to 76.99.
Given these developments, analysts recommend closely monitoring trade relations, particularly any shifts in tariff negotiations that could alter market sentiment towards the MYR. The Prime Minister of Malaysia, Anwar Ibrahim, has indicated a commitment to seeking regional cooperation in response to U.S. tariffs. This diplomatic approach may play a crucial role in shaping the future stability and valuation of the MYR in the face of ongoing external pressures.
