Malaysian ringgit rises 0.8% to lead most Asian FX higher

Malaysian ringgit rises 0.8% to lead most Asian FX higher

The Malaysian ringgit (MYR) experienced a significant rise of 0.8% on July 2, 2025, leading most Asian currencies higher. This upward trend was driven by a combination of factors, including trade negotiations and geopolitical developments.

The rise in the Malaysian ringgit can be attributed to the recent tariff negotiations between Malaysia and the United States. On July 31, the US government announced a 19% tariff on Malaysian imports, effective from August 1. However, the White House stated that the new rate would not apply to goods already in transit before the deadline. This announcement provided some relief to Malaysian exporters, boosting market confidence [2].

Additionally, the upcoming ASEAN-US Special Summit, scheduled for October 26 in Kuala Lumpur, is expected to address pressing regional issues, including US tariffs. The summit will bring together the leaders of all ten ASEAN countries and the US president to discuss these issues, which could positively impact Malaysia's trade relations [2].

The rise in the Malaysian ringgit was also supported by the broader Asian currency market. Asian currencies fell sharply on July 27, with the Philippine peso and Taiwan dollar leading the decline, as regional economies scrambled to secure US trade deals ahead of the August 1 tariff deadline. However, the Malaysian ringgit managed to recover, benefiting from the overall positive sentiment [3].

The Federal Reserve's decision to hold interest rates steady overnight, while offering less dovish commentary than markets had hoped, also contributed to the dollar's strength. This added pressure on regional currencies, including the Malaysian ringgit, but the ringgit's resilience indicates a positive outlook for Malaysia's economy [3].

In contrast, other Asian currencies faced uncertainty due to unclear trade developments. The Thai baht and ringgit, for instance, faced significant volatility as trade negotiations continued. The Thai baht fell 0.18% on July 2, while the ringgit lost 0.40% in its fifth consecutive day of losses [3].

The Malaysian ringgit's performance is a positive indicator for the country's economy, suggesting that investors are optimistic about the ongoing trade negotiations and the upcoming ASEAN-US Special Summit. As trade tensions ease and regional economies secure favorable trade deals, the Malaysian ringgit is likely to continue its upward trend.

References:

[1] https://www.xe.com/en-au/currencyconverter/convert/?Amount=1&From=MYR&To=USD
[2] https://www.therakyatpost.com/news/2025/08/01/donald-trump-confirms-kl-trip-us-lowers-tariff-on-malaysian-goods/
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TS08R:0-asian-currencies-tumble-as-us-tariff-deadline-looms-dollar-surges/