Malaysia’s industrial production rose 4.8% year on year in December. This was above the 4.5% Bloomberg consensus and up from 4.3% in November. Growth was driven by electronics and other export-focused manufacturing. Mining output fell 5.2% year on year, after a 2.3% rise in November. This was the first contraction since May 2025. The drop was linked to lower natural gas production. A recovery is expected in 2026 as more facilities come online after maintenance ends.

Ringgit Strength And Trading Range

USD/MYR fell 0.3% to around 3.92 and stayed near its lowest level since July 2018. The move was supported by foreign inflows and strong semiconductor exports. In the near term, USD/MYR is expected to trade in a 3.90 to 4.00 range. The article was produced with an AI tool and checked by an editor. Data from December 2025 pointed to strong industrial production, and that trend appears to be continuing. The Malaysian ringgit has strengthened against the dollar, pushing USD/MYR to levels not seen since mid-2018. Markets expect the pair to stay in a tight 3.90 to 4.00 band in the near term. This view is supported by new data. January trade figures, released last week, showed semiconductor exports rose 9.5% year on year, extending the strong performance from late last year. We also recorded net foreign inflows of $1.5 billion into the local bond market in January, which signals ongoing investor confidence.

Volatility Strategies And Key Risks

With volatility expected to stay low, selling options may be attractive in the coming weeks. Short-dated strangles or iron condors with strikes outside the 3.90–4.00 range could benefit from time decay. One example is selling a 3.88 put and a 4.02 call. This strategy depends on the exchange rate staying within the range and avoiding major breakouts. Looking back at 2018, the last time the pair traded at these levels, it found strong support around 3.85–3.90 for several months. One risk to watch is the mining sector. If it rebounds as expected, it could add support to the ringgit and push USD/MYR toward the lower end of the range. Another key risk is a sudden rise in global risk aversion, which could lift the dollar and break above 4.00. For investors seeking yield, range accrual notes are another option. These products pay a higher coupon for each day USD/MYR closes within the 3.90–4.00 band. This matches the view that the currency will remain stable in the weeks ahead. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now