KUALA LUMPUR (Nov 2): HSBC expects the ringgit to weaken in 2027, as a resilient greenback and widening interest rate differentials weigh on the local currency.
The ringgit may head towards 4.10 to 4.20 against the US dollar, according to the bank’s forecasts. The local unit could weaken towards the upper end of that range or slightly even more by the end of 2026, Joey Chew, the head of Asia currency research at HSBC, said at a briefing on Monday.
“We still think that the dollar will still [have] the upper hand,” she said, noting rising political news headlines in Malaysia with the impending elections and “we feel that some global investors might be a bit more cautious”.
The ringgit was trading around 4.07 against the greenback on Monday, whipsawed by rising US interest rates and global bond yields despite a boom in artificial intelligence that powered the country’s exports.
Malaysia’s economy expanded at a faster than expected clip of 5.3% in the third quarter thanks to growth of manufacturing and services sectors.
The ringgit will continue to outperform Southeast Asian peers with Malaysia’s strong growth, HSBC’s Chew said. Still, the gap between US and Malaysian interest rates could encourage investors to seek higher returns overseas, limiting upside for the ringgit, she flagged.
Gold to recover
On gold prices, HSBC expects prices to recover in 2027 as central banks approach the end of their interest rate-hiking cycles.
Gold has underperformed as higher oil prices fuelled inflation concerns and prompted central banks to raise interest rates, making non-yielding assets such as gold less attractive.
“Next year, they will just sort of hold their rates at a high level, but no longer keep raising rates,” Chew said. “That’s when we expect gold to come back next year.”
The briefing coincided with HSBC Malaysia's launch of an upgraded FX on Mobile service, which allows customers to track currency movements, set exchange rate alerts and convert currencies through its mobile banking application.