Trading AUD/MYR

The AUD/MYR currency pair is a popular asset on the forex market. The Australian Dollar represents one of the world’s largest economies and is the fifth most traded currency. While the Malaysian Ringgit is one of the stronger currencies on the Asian continent, it is susceptible to changes in global emerging markets and political sentiment. This page will break down the history of the AUD/MYR. We’ll also explain how to trade the pair, looking at factors that influence the AUD vs MYR exchange rate and principles for successful forex trading.

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AUD/MYR Explained

Firstly, what does the AUD/MYR mean? It is simply the forex quote for the Australian Dollar vs Malaysian Ringgit exchange rate. The Australian Dollar is the base currency, whilst the Malaysian Ringgit is the counter currency.

Note, the Ringgit is often unofficially referred to as the Malaysian dollar.

Why Day Trade AUD/MYR?

With so many daily forex options out there, why should you focus your attention on the AUD/MYR?

  • Recovery – The MYR has weakened in the past, but it has seen over 10% year-on-year growth recently.
  • Volatility – The value of the MYR is susceptible to changes in global emerging markets and political sentiment in Malaysia. The AUD is also uncommonly counter-cyclical and volatile. As a result, there is plenty of pip movement and opportunities to profit from steep price fluctuations.
  • Related to commodity prices – Both AUD and MYR are driven, in part, by the price of commodities. Malaysia is an exporter of oil and natural gas, so the MYR has some correlation to commodity prices. The strength of AUD is closely tied to its exposure to Asia and the commodity cycle. AUD is a popular alternative for traders looking to go long on commodity exposure and/or Asian resource demand.
  • Availability of resources – Economic data that you can use to help with an AUD v MYR 30 days forecast can easily be found online, for free. Australia’s Bureau of Agricultural and Resource Economics and Sciences (ABARES) produces regular reports on crop planting, weather, harvests, mine output, and money in metal prices, all of which can affect the AUD exchange rate. Technical analysis today is also easier than ever before. This is because you can analyse graphs and candlestick charts with customised indicators and sophisticated trading tools.

AUD To MYR History

The MYR has been Malaysia’s official currency since 1975. Originally, MYR was pegged to the USD, but over time the peg was removed. It was reinstated in 1997 as Asia suffered a financial crisis. Because of the surge in capital outflows during the crisis, trading Ringgit outside of Malaysia was banned. Today, that peg to the US Dollar has once again been removed, and MYR now floats against many major world currencies on the forex market.

The Malaysian central public bank, the Bank Negara Malaysia (BNM), has a policy of keeping the MYR exchange rate down instead of supporting it. With that said, the MYR has regained strength in recent years.

The Bank for International Settlements (BIS) reported that the MYR accounted for about 0.1% of daily turnover in the forex market in April 2019. The MYR also ranked 34th in trading activity in that period among the world’s currencies.

The Malaysian Ringgit is made up of 100 sen and is issued in denominations of one, five, 10, 20, 50, and 100. The 500 and 1,000 denominations are not usable, even though some are still in circulation.

The Malaysian Economy

Malaysia is a rapidly developing country that is now experiencing industrialisation. Its currency plays a key role in its development since it has been strong for some time. Understanding its drivers will help you make informed decisions when investing in the AUD/MYR.

  • The Malaysian economy is now the fourth biggest in South East Asia after Indonesia, Thailand and the Philippines. It is the world’s 35th largest economy.
  • The economy of Malaysia is one of the globe’s most competitive, and is very diverse and robust thanks to the export value of its high-tech products, which stands at around $63 billion.
  • Malaysia’s economy previously relied on the production of agricultural export commodities and minerals, but now it relies on manufacturing and services.
  • Malaysia has many natural resources, especially in the minerals, forestry and agricultural sectors. Its most valuable exported resource is petroleum, with tobacco, pineapples, pepper, cocoa, timber, and rubber being vital to the economy’s health.
  • Malaysia also exports large amounts of palm oil products, exporting the second greatest volume after Indonesia.
  • There was a major change in Malaysia’s economy in the last decade, which affected most of their capital investments.
  • Economic downturns in the last six years have severely damaged the country’s investments.

Trading the AUDMYR currency pair

The Australian Economy

It’s also important to understand the make-up of the Australian economy to implement an effective strategy when trading the AUD/MYR.

  • In terms of GDP (measured in U.S. dollars), Australia is the 14th-largest economy.
  • Among the developed countries, Australia stands out for its heavy reliance upon commodities. Mining (including energy) represents over 8% of the country’s GDP, with a heavy emphasis on nickel.
  • Farming is also a critical component, as over 2% of the GDP is tied to agriculture (and related sectors), with a large percentage of the output going outside the country.
  • AUD is popular among forex traders for its 3 G’s – geology, geography, and government policy. Geology has provided the country with a wealth of natural resources that are in high demand, including oil, gold, agricultural products, diamonds, iron ore, uranium, nickel, and coal.
  • Due to its geography, Australia is positioned as an ideal trading partner for many fast-growing Asian economies that have a high level of demand. Government policy has also meant the country has had fairly high-interest rates, a stable government and economy, a lack of intervention in the currency markets, and a Western approach to business.

Trading the AUD/MYR FX pair

Factors Driving MYR Value

Several factors can impact the MYR exchange rate:

  • The flow of exports and imports into and out of the country – Malaysia has a diversified export base, which includes natural gas, electrical appliances, electronic components, and palm oil.
  • The flow of capital into and out of the country – In the long-term, the Malaysia capital flows is projected to trend around 7800.00 MYR Million in 2021.
  • The rate of inflation set by the Bank Negara Malaysia – Bank Negara Malaysia (BNM) is responsible for managing monetary policy in Malaysia. The central bank leverages this policy on the MYR bank rate in an attempt to ensure financial and monetary stability. One key facet of sustainable growth is price stability, and in this spirit, the financial institution aims to keep inflation low. The monetary policy also aims to keep exchange rates stable, for example, in the AUD/MYR.
  • The merchandise trade balance – Malaysia’s trade balance for 2019 was $27.14B, a 12.76% increase from 2018.
  • The relative growth of the economy – Malaysia has enjoyed many years of robust growth, and its GDP PPP was US$747 billion in 2014 and US$800 billion in 2015. In December 2020 the World Bank predicted that Malaysia’s economy is expected to grow by 6.7% in 2021 following a projected contraction of 5.8% in 2020 caused by the COVID-19 pandemic.
  • The long-term and short-term interest rate differential – The interest rate in Malaysia has been held at a record low of 1.75%.
  • The cost of borrowing – Bank lending in Malaysia reached a record low of 3.51% in December of 2020.

Factors Driving AUD Value

Several key drivers affect the AUD exchange rate:

  • Major economic data – Including the release of GDP, retail sales, industrial production, inflation, and trade balances, can affect AUD.
  • Traders should also take note of information – Employment, interest rates (including scheduled meetings of the central bank), and the daily news flow – natural disasters, elections, and new government policies can all have significant impacts on the AUD/MYR exchange rate.
  • Australia’s economy is driven by commodities – Both metals and grains, and reports on crop planting, weather, harvests, mine output, and metal prices can all move AUD. Australia’s Bureau of Agricultural and Resource Economics and Sciences (ABARES) produces regular reports on these.
  • The strength of the Aussie dollar – Value is closely tied to its exposure to Asia and the commodity cycle.
  • Higher commodity prices – Create recessionary (or at least inflationary) pressures in most developed economies. This can lead traders to have concerns for the health and growth of economies in Europe, North America, and Japan, which can make the Australian economy look favourable. That positions the Australian dollar as a popular alternative for traders looking to go long on commodity exposure and/or Asian resource demand while going short on countries likely to suffer due to higher input costs.
  • Australia produces relatively little in the way of manufacturing exports – Most of the country’s exports also go to the growing economies of Asia.

Principles Of Trading AUD/MYR

Whether you’re trading AUD to MYR or another currency pair, you will want to develop a good strategy to incorporate into your investing plan. This will significantly increase your chances of success when trading forex.

Several popular strategies used to trade forex could be suitable for you, depending on your experience level and personality.

The popular principles listed below are common day trading tactics to help you become a successful forex trader.

  1. Keep up to date with news – Day traders need to keep up with the latest news and events that could affect a currency’s exchange rate – e.g. interest rate announcements from central banks. Events from yesterday, for example, can significantly impact AUD MYR exchange rate forecasts and market outlook.
  2. Set aside funds – Assess how much capital you’re willing to risk on each trade and set your risk accordingly
  3. Set aside time for the markets – Day trading takes time. It requires a trader to track the FX markets and spot opportunities, which can arise at any time during trading hours. Studying average historical 10 year charts, for example, can also be a great way to learn more about the AUD/MYR pair.
  4. Start small – Whether you’re a beginner or experienced but investing in a new currency pair like the AUD/MYR, start small to test out your strategy. Check the current buying and selling rates before you take a position and use leverage calculators offered by many top forex brokers.
  5. Cut losses with limit orders – Use stop losses to help manage your AUD/MYR trades. If the currency dips below a certain price it will automatically sell the trade, meaning you won’t lose more than a certain amount
  6. Stay calm – there are times when the forex markets test your nerves. As a day trader, it’s important to stay calm. Decisions should be made using logic and not emotion
  7. Stick to your plan – Developing a strategy in advance is important to becoming a successful day trader. Don’t let your emotions get the best of you and abandon your strategy.

Final Word On Trading AUD/MYR

The AUD/MYR forex pair offers a good opportunity for traders looking to speculate on emerging markets. While not traded in the significant volumes seen with major FX pairs, there is plenty of room to implement effective strategies. Before you start trading AUD/MYR, it’s important to understand what influences the exchange rate and strength of each economy. You’ll also need a top forex broker that offers excellent tools, such as live exchange rate charts, historical data and real-time quotes to enable you to make predictions about future prices. Oanda is one popular option.


Why has the MYR weakened against the AUD in recent years?

The Malaysian Ringgit weakened in 2020 due to uncertainty around Covid-19. The MYR also weakened in tandem with lower crude oil prices at about US$30 a barrel because Malaysia is a net oil exporter.

Is MYR getting stronger against the AUD?

The MYR is forecast to continue strengthening to the 4.00 level next year on the back of a recovering economy, helped by the distribution of vaccines to combat the Covid-19 pandemic, stronger energy prices, and fund inflows.

Is MYR/AUD a restricted currency?

The MYR is often considered to be a restricted currency. Fund transfers in this currency are typically not allowed outside of Malaysia, though online trading is still possible.

Why is the AUD so strong against the MYR?

Several forces are driving the AUD. First and foremost, the rising prices of commodities, particularly iron ore. The price of iron ore is trading at a near eight-year high as China supercharges its spending on infrastructure, which requires steel, which relies on iron ore from Australia.

Is the AUD likely to rise against the MYR?

In recent years, the trend for the Australian dollar is rising, especially if you agree with the top 4 banks in Australia. ANZ, CBA, NAB, and Westpac have all been forecasting the strength of the currency will continue to rise.