The exchange rate forecast for the Malaysian Ringgit (MYR) against the Chinese Yuan (CNY) reflects growing concerns stemming from recent geopolitical tensions and trade dynamics. Analysts note that the MYR is currently trading near a 30-day low at 1.6856, just below its three-month average. This indicates a notable downward trend, contributing to a stable trading range of approximately 4.5%, between 1.6603 and 1.7349.
The imposition of a 24% tariff by the U.S. on Malaysian imports as part of the escalating trade war has negatively impacted the MYR, prompting fears of a regional economic slowdown. Malaysia has chosen not to retaliate, which some analysts believe could help mitigate further depreciation, but the overall sentiment for emerging Asian currencies remains bearish amid increased global trade tensions.
On the other hand, the CNY has also faced significant downward pressure. As recent developments indicate, the yuan fluctuated past critical psychological levels, suggesting challenges in the recovery of China's economy. Reports detail that the People's Bank of China (PBOC) is under increasing pressure to consider further easing monetary policy to support economic growth as it grapples with slow growth and external tariff pressures. Economic factors such as a spike in new yuan loans and hints at potential monetary stimulus have prompted JPMorgan to revise its year-end yuan forecast to 7.15 per dollar, feeding some optimism into the market.
Moreover, the volatility in oil prices, currently at $69.67, which is 2.5% higher than its three-month average, indicates potential secondary impacts on the MYR, given Malaysia's reliance on oil exports. Oil prices have traded in a volatile range of 31.1%, suggesting that further fluctuations could influence the MYR's performance against the CNY.
Market experts remain cautious, emphasizing the interconnectedness of these factors, which could keep the MYR under pressure while they predict that the CNY may experience further weakening if economic stimuli fail to materialize effectively. Businesses and individuals engaging in international transactions should stay vigilant to potential shifts in these currencies, considering the broader macroeconomic climate.