OCBC’s Sim Moh Siong and Christopher Wong stress that the Malaysian Ringgit (MYR) remains relatively well supported by a softer US Dollar (USD) and robust domestic fundamentals. July exports surged and the trade surplus widened, underpinned by strong electronics and firmer palm Oil prices, though he cautions that elevated Oil and long-end US Treasury yields may temper the immediate FX impact.
Exports and trade surplus underpin MYR
“MYR remained relatively well supported, helped by the softer USD backdrop and still-favourable domestic fundamentals.”
“Trade data released yesterday saw July exports rose 38.0% YoY, stronger than expected, while the trade surplus widened to MYR22.5bn, adding to the picture of resilient growth following the strong 2Q26 GDP print.”
“The continued strength in electronics exports and firmer palm oil prices should also remain supportive for Malaysia’s external position.”
“That said, the immediate FX impulse from the strong data may be more modest, particularly with oil and long-end US Treasury yields still elevated.”
“We continue to see MYR relatively well placed within the region, especially if the broader USD pullback extends.”
“USD/MYR last closed at 4.0450 levels. Bearish momentum on daily chart intact though RSI fell into oversold conditions. Pace of decline may moderate with risk of rebound not ruled out in the interim. But bias to lean against rebound.”
“Resistance at 4.0610 (38.2% fibo retracement of May low to June high), 4.08 levels. Support at 4.0320 (100, 200 DMAs, 50% fibo), 4 levels (61.8% fibo).”
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