USD/MYR: U.S. Dollar Likely to Trade Around 4.05 Ringgit in Short Term

Kenanga Investment Bank's currency outlook dated January 16, 2026, projects that the U.S. dollar may trade around 4.05 Malaysian ringgit in the near term, citing a mix of technical and fundamental drivers that should keep the USD/MYR pair in a narrow range.

In the research note, Kenanga highlighted seasonal dollar strength, persistent U.S. economic resilience and shifting expectations about the Federal Reserve's policy path as the main forces shaping the pair. The bank also identified short-term technical levels, noting resistance near 4.063 and support at about 4.051, suggesting limited room for a decisive breakout without fresh macro impetus.

Market prices have reflected this range-bound view: spot data from late March show USD/MYR trading around 4.049–4.043, consistent with Kenanga's baseline projection and indicating a market focused on upcoming U.S. data and policy signals. Liquidity patterns around these levels point to heightened sensitivity to newsflow rather than fundamental shifts.

For Malaysia's broader economy, a stable-to-weaker ringgit at these levels has mixed implications. A firmer dollar can raise import costs and feed through to inflation, whereas higher commodity prices and export receipts can provide offsets to the current account. Kenanga notes that the ringgit behaves increasingly like a high-beta emerging market currency, making it more reactive to global risk sentiment.

Analysts expect the pair to remain rangebound until clearer signals emerge from U.S. employment and inflation data or from a shift in Fed communication. Short-term strategies advised by market commentators include monitoring the 4.051 support and 4.063 resistance levels and positioning for limited directional moves, with the outlook hinging on whether the Fed's path toward rate adjustments accelerates or pauses.