Ringgit Seen Weakening as Traders Weigh Rate Cut in Malaysia, Trump Tariffs

But pressure on currency may ease amid growing bets for more rate cuts from US Fed

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MELBOURNE - Asia's top-performing currency in 2024 is set for a bout of weakness as traders brace themselves for a higher risk of an interest rate cut amid trade tensions.

After being largely range-bound in 2025, the Malaysian ringgit may fall to 4.6 per US dollar by end-June, according to analysts at Credit Agricole and Malayan Banking. The currency strengthened to 4.449 per US dollar at 5.30pm on March 17, paring last week's loss. The Singapore dollar traded at 3.3355 ringgit on March 17.

"Slowing global trade as well as Chinese and Malaysian growth due to Trump tariffs could force Bank Negara Malaysia to cut rates late in 2025," said senior strategist David Forrester at Credit Agricole in Singapore.