Malaysia: Cautious trade outlook with export risks – UOB

FXStreet Insights Team FXStreet

UOB economists Julia Goh and Loke Siew Ting notes that Malaysia’s export momentum softened in March but the trade surplus widened to a one-year high. Strong Electrical and Electronics (E&E) shipments and re-exports supported exports, while imports were driven by capital goods. They highlight geopolitical and cost risks and maintains its 2026 export growth forecast at 2.5%.

Exports slow but surplus strengthens

"As exports continued to outpace imports, the trade surplus widened to a one-year high of MYR24.6bn in Mar (Feb: +MYR16.7bn). Cumulatively, trade surplus amounted to MYR63.2bn in 1Q26 (4Q25: +MYR48.6bn), the largest since 1Q23. This stronger trade balance is expected to translate into a wider current account surplus of MYR15.0bn in 1Q26 (4Q25: +MYR2.0bn). Actual 1Q26 current account data will be released on 15 May, together with the 1Q26 final GDP figure."

"While the AI upcycle is expected to continue underpinning Malaysia’s trade prospect this year, renewed Middle East tensions—particularly the potential prolonged closure of the Strait of Hormuz—have heightened downside risks to global growth and demand. Higher input costs and supply chain disruptions across oil and non-oil materials may weigh on near-term exports and production despite easing US tariff concerns. We remain cautious and maintain our 2026 export growth forecast at 2.5% for now (BNM est: +8.6%; 2025: +6.4%)."

"In sum, any prolonged disruption to the Strait of Hormuz would adversely affect trade through higher cost, reduced volumes, and weaker business confidence. Elevated crude oil and shipping costs could inflate the import bill and offset export gains even if export volumes remain resilient. Limited cost pass-through amid softer demand and raw material constraints may prompt firms to adopt a more cautious stance in the near term. Hence, we keep our cautious view on Malaysia’s trade prosects, maintaining our 2026 full-year export growth forecast at 2.5% for now (BNM est: +8.6%; 2025: +6.4%)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.