US Dollar Seen Weakening Over Next 12 Months, Ringgit, Asian Equities To Benefit

Barnama

17-07-2025

BUSINESS
By Anas Abu Hassan
KUALA LUMPUR, July 17 (Bernama) -- A weakening US dollar is expected to continue benefiting the ringgit and Asian equities going forward, albeit with a volatile outlook in the second half of 2025 (2H 2025), according to Standard Chartered Bank.
Its senior investment strategist, Yap Fook Hien, noted that the bank is not expecting the greenback to bounce back in the near term as most of the weakening has already been factored in.
"Our view is that the US dollar will be weaker at least for the next 12 months because of the cyclical factors, and we expect it to be lower as our target is that the US Dollar Index (DXY) would slip to 96 points.
"But it is also important to note that we are not looking at a collapse of the US dollar. Our forecast is for 12 months, so beyond that we are going to see how the economy develops and grows, but for the moment we do not see a bounce back," he said in a press conference on the 2H 2025 global market outlook.
According to Yap, the bank has identified key themes for investors to consider in the remaining half of the year against the backdrop of dollar weakening, including an overweight on global equities with a tilt towards Asian markets excluding Japan. "The weak US dollar will be positive for equities, and essentially, when the dollar is weak, the Asian ex-Japan equity markets tend to do well. Our two preferred markets are China and South Korea equities," he said.
Standard Chartered Malaysia's head of managed investment and advisory, Ng Shin Seong, said he believes the ringgit will continue to trade range-bound between 4.20 and 4.30 against the US dollar as much of the greenback's weakening has already been priced in. He reckons that the interest rate differential between the United States and Malaysia will also narrow down, given the recent pre-emptive rate cut by Bank Negara Malaysia on its overnight policy rate (OPR) as well as the expectation of US interest rate cuts in the coming months.
Standard Chartered Malaysia's head of wealth and retail banking, Harmander Mahal, said in a statement that despite ongoing global trade shifts and geopolitical tensions, global equities have remained robust, rising eight to 10 per cent quarter-to-date.
"This reflects sustained investor confidence and a reacceleration in risk appetite, particularly across Asia, where emerging markets benefited from stronger capital inflows and currency tailwinds.