The exchange rate forecast for the Hong Kong dollar (HKD) to Malaysian ringgit (MYR) suggests a cautious outlook, influenced by recent events and macroeconomic indicators in both regions. The HKD has maintained stability in October amid uncertainties surrounding U.S. interest rates. Although efforts by Hong Kong’s government to bolster the city as an international financial hub could provide near-term support, analysts warn that a more substantial recovery will hinge on a more significant reduction in interest rates and improvement in the local economy. The recent policy measures announced by Chief Executive John Lee aim to enhance Hong Kong's financial standing, but the anticipated recovery in domestic demand appears muted due to ongoing challenges such as declining home prices and a sluggish labor market.
On the Malaysian side, the outlook remains clouded by U.S. tariffs, with President Donald Trump’s recent 24% tariff on imports from Malaysia causing considerable concern. Malaysia’s reaction has been diplomatic rather than retaliatory, as Prime Minister Anwar Ibrahim has indicated a focus on regional cooperation in response to these measures. Currency analysts highlight that Malaysia's position in this trade tension, alongside broader trends in the region, could adversely affect the MYR. The broader sentiment regarding emerging Asian currencies has turned negative, exacerbated by fears of an escalating trade war that could curb investor appetite for risk.
The current exchange rate of HKD to MYR has seen some fluctuation, recently peaking at 7-day highs of approximately 0.5409, which is notably 2.9% below its three-month average of 0.5571. This indicates a relatively stable trading range, with the currency pair oscillating within a 7.5% band. Such dynamics are compounded by the volatility in oil prices, with recent figures showing crude oil priced at 74.23 USD, significantly above its three-month average of 66.94. The sustained rise in oil prices, reflected in a volatile trading range, may influence Malaysia's economic outlook and, consequently, the strength of the MYR.
Markets should remain vigilant regarding upcoming economic developments and policy responses in both Hong Kong and Malaysia, as these factors are likely to play a crucial role in shaping the HKD to MYR exchange rate in the near future.