The recent exchange rate forecasts for the MYR to HKD pair indicate a period of volatility and potential downward pressure on the Malaysian Ringgit (MYR) due to geopolitical and economic factors. Analysts have noted that the U.S. administration's announcement of a 24% tariff on Malaysian imports has created uncertainty within the region, pushing investor sentiment towards cautiousness. This has contributed to a weakening of emerging Asian currencies, including the MYR, which sunk to 30-day lows near 1.8350, slightly below its three-month average of 1.8441.
The outlook for the MYR is further impeded by an overall deterioration in risk appetite prompted by rising fears of a global trade war. Regional currencies, such as the Thai baht and South Korean won, have exhibited a downward trend, reflecting a broader trend impacting the MYR. The current volatility is also influenced by fluctuations in oil prices, with crude oil trading at $69.67, which is above its three-month average. Considering Malaysia's status as a key oil exporter, any significant changes in oil prices could further impact the MYR.
In contrast, the Hong Kong dollar (HKD) has remained under pressure due to persistent outflows and a widening interest rate differential between the U.S. and Hong Kong. The HKD has been trading near the upper limit of its peg against the U.S. dollar, consistently hitting the 7.85 level, which suggests ongoing weakness. The Hong Kong Monetary Authority (HKMA) has intervened to stabilize the currency, but forecasts indicate that unless there is a decisive shift from the Federal Reserve, the HKD may continue to experience downward pressure.
As for the economic backdrop, reports suggest that the Hong Kong economy is facing significant challenges, including a slight uptick in unemployment and easing inflation, which might affect future strength in the HKD. The outlook for the HKD will heavily depend on local economic recovery and the actions of the Fed.
In summary, analysts expect the MYR to remain vulnerable due to tariff implications and regional sentiment while the HKD is likely to continue facing pressure unless fundamental shifts occur in economic indicators or monetary policy. Businesses and individuals engaging in transactions involving these currencies should closely monitor these developments for potential impacts on exchange rates.
