The MYR’s rally started only after Malaysia successfully hosted the ASEAN Summit on October 26-28, which significantly enhanced the country’s appeal as a China Plus One investment destination. USD/MYR was supported at 4.20 for most of May to October following its decline from 4.50 after Liberation Day in April. During this period, investors reflected their optimism in the Malaysian economy primarily through the recovery of the stock market to levels at the start of the year. Also, earlier on October 17, when Malaysia’s 3Q25 GDP growth exceeded expectations, improving to 5.2% YoY vs. the consensus for a decline to 4.2% from 4.4% in 2Q25, MYR continued to languish in a 4.22-4.2340 range against the USD. 
USD/MYR first broke below 4.22 on October 27, following the ASEAN Summit, and fell to 4.1865 on October 29, amid a moderation in the DXY Index to 98.6. USD/MYR corrected up to 4.2073 on November 4 during the DXY’s ascent to 100, before mounting a significant fall to a 13-month high of 4.1220 on November 12 on the DXY’s decline to 99.5. Put simply, USD/MYR remained correlated with the DXY, more in direction than magnitude.
On a year-to-date basis, USD/MYR started 2025 by tracking closely USD/CNY into the Liberation Day tariffs (April 2); CNY and MYR shared a common legacy of de-pegging from the USD in July 2005. After Trump’s first worldwide tariff pause on April 9, USD/MYR shifted its link to USD/SGD, which ended after the ASEAN Summit. However, USD/MYR is converging with the DXY Index, which currently indicates a support level of around 4.10. MYR bulls wishing for USD/MYR to decline further to 4.00 would also need to believe in the DXY declining further below 99.5. Overall, the MYR is moving our way, but perhaps too fast. We maintain our end-of-year USD/MYR forecast at 4.17.
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