US dollar bills and Asian currency notes on desk with forex chart in background

The Dollar Is Back: Why Expat Currency Gains in Asia May Be Reversing

Q: How do I hedge currency risk as an expat?

Practical hedging means holding cash and assets across multiple currencies, timing large transfers when rates are favourable, and using forward contracts for known obligations. The structural answer is to build a portfolio that spans jurisdictions and currencies by design.

April 05, 2026

The US dollar just posted its biggest monthly gain since July, rising 2% against a basket of Asian currencies on haven demand. For European expats who spent the past year benefiting from a weaker dollar, the trend may be shifting. The MYR, which strengthened nearly 10% against the USD over 12 months, has stalled at 4.04 and faces headwinds that did not exist three months ago. If your financial plan assumed the dollar would keep weakening, April is the month to revisit that assumption.

Key Takeaways

The USD has appreciated 2% month-over-month against Asian currencies, the largest gain since July 2025
MYR has stalled at 4.04 per USD after a 10% appreciation over 12 months, with oil supply risks threatening the rally
Haven demand from the Hormuz crisis and a hawkish Fed (one cut expected in 2026) are both supporting the dollar
Expats earning in Asian currencies with obligations in GBP or EUR face tightening margins on remittances

Why Is the Dollar Strengthening Now?

Two forces are driving the dollar higher simultaneously: geopolitical haven demand and a Federal Reserve that is in no hurry to cut rates. The Hormuz crisis has pushed investors toward USD-denominated assets as a safety trade. At the same time, the March FOMC meeting confirmed the Fed expects only one rate cut in 2026, with the median dot at 3.4%.

The combination is potent. The dollar index has climbed steadily since mid-March, reversing a broader 2025-2026 trend of USD weakness. For expats who earn in MYR, THB, or SGD and remit to GBP or EUR, the dollar's strength has an indirect but material effect, because most cross-currency pairs route through USD pricing.

The Fed's hawkish stance is not a surprise, but it is more entrenched than markets expected three months ago. Seven FOMC members now project no cuts at all in 2026. Core PCE inflation is projected at 2.7%, up from 2.5% in December. Goldman Sachs has pushed its first-cut call from June to September. The "higher for longer" thesis is winning.

How Does Dollar Strength Affect Expats Earning in MYR?

If you earn in ringgit and send money home to service a GBP or EUR mortgage, your effective transfer rate has worsened since mid-March. The MYR's 10% appreciation against the USD over the past 12 months was a tailwind for expats. That tailwind is now fading.

The ringgit's support came from two sources: Malaysia's status as a net oil exporter and strong foreign inflows into Malaysian bonds and tech investments. Both are under pressure. The oil export revenue depends on refining capacity, which requires crude imports that are currently stranded by the Hormuz blockade. If Malaysia's oil reserves deplete by May, the fundamental support for the ringgit erodes with them.

USD/MYR stood at 4.0385 as of April 2, down slightly from the March peak of 4.0735 but still 2.3% above February lows. For an expat sending RM10,000 per month to the UK, the difference between 4.04 and 3.88 (the 12-month low) is roughly £100 per transfer. Over a year, that is £1,200 in lost purchasing power on the remittance alone.

For a deeper look at how the Hormuz crisis is reshaping currency dynamics across the region, see our earlier analysis of the ringgit reversal.

What About Expats in Singapore and Thailand?

Singapore's dollar (SGD) is holding up better than most regional currencies, but Thailand's baht (THB) is under real pressure. The distinction matters for expats in each country.

Singapore

MAS maintains a tightening bias on its exchange rate policy, which anchors the SGD. The currency has been resilient against the USD, and Singapore's diversified economy is less exposed to a single commodity shock. Expats earning in SGD are relatively protected, though rising electricity costs from the LNG supply disruption will eat into disposable income regardless of FX.

Thailand

The THB is a different story. Thailand is a net oil importer, and the government has been bleeding subsidy reserves to cap fuel prices. The baht has weakened against the USD, and further depreciation is likely if oil stays above $100. Expats earning in THB with obligations in stronger currencies face a double hit: rising local costs and a weaker currency for remittances.

The tourism headwinds we covered earlier compound the problem. If tourism revenue drops, the current account worsens, and the baht faces additional pressure.

Should Expats Lock in Rates or Wait?

If you have a known obligation in a foreign currency within the next 90 days, locking in a rate now reduces your exposure to further deterioration. This is not a speculative call on where the dollar goes next. It is basic risk management for a payment you know you need to make.

Forward contracts and rate-alert services are available through most international transfer providers. The cost is minimal compared to the risk of a 3-5% adverse currency move over a quarter.

For longer-term positioning, the question is structural. If you plan to repatriate savings to Europe within 2-3 years, the current MYR level (4.04 per USD, roughly 5.35 per GBP) may look attractive in hindsight if Malaysia's energy crisis deepens. Equally, if the Hormuz Strait reopens and oil revenues normalise, the ringgit could resume its strengthening trend.

The honest answer is that nobody knows. What you can control is your exposure to the range of outcomes. Currency diversification across your savings, your investments, and your cash reserves is the structural response to uncertainty you cannot predict.

How Does This Connect to Portfolio Positioning?

Currency is a risk that sits underneath your portfolio, whether you manage it or not. An expat holding Irish-domiciled UCITS ETFs denominated in USD while earning in MYR and planning to retire in EUR is running three currency exposures simultaneously. None of them are typically hedged.

The dollar's resurgence makes USD-denominated assets more expensive to buy with Asian currencies. If you are making regular contributions to a USD-based portfolio, your effective cost per unit has risen. Over a multi-year accumulation phase, a 5-10% currency shift compounds significantly.

This does not mean you should avoid USD assets. The structural case for globally diversified portfolios remains strong. It means you should be aware of the currency layer and factor it into your contribution timing and allocation decisions.

For expats who have been thinking about starting their investment plan, the currency environment adds urgency to getting the structure right. A well-designed plan accounts for multi-currency exposure from day one rather than treating it as an afterthought.

Frequently Asked Questions

Q: Is the ringgit going to weaken further?
A: That depends largely on whether Malaysia secures alternative oil supply before reserves deplete in May. If supply is secured, the ringgit's fundamental support (oil export revenue, foreign bond inflows) holds. If not, a move back toward 4.20-4.30 per USD is plausible. [Inference]

Q: Should I convert all my MYR savings to USD or GBP now?
A: Converting your entire position into one currency is just replacing one concentration with another. A more balanced approach is to hold cash reserves across two or three currencies that match your actual spending and obligation profile. Review your overall financial plan first.

Q: How does the Fed rate decision affect Asian currencies?
A: Higher US rates make dollar-denominated assets more attractive, drawing capital away from Asian markets. The Fed's signal of only one cut in 2026 keeps the interest rate differential in the dollar's favour. Asian central banks face pressure to maintain or raise their own rates in response, which tightens financial conditions locally.

Q: What is the best currency for expat savings?
A: There is no single best currency. The right mix depends on where you earn, where you spend, where you plan to retire, and what obligations you hold in each currency. A British expat in KL with a GBP mortgage needs different currency positioning than a Dutch expat in Singapore planning to retire in Portugal.

Q: Does dollar strength affect my UCITS ETF returns?
A: If your UCITS ETFs are denominated in USD, a stronger dollar means they are worth more when converted back to your local currency. The reverse is also true: buying more units costs more in MYR, THB, or SGD terms. Over long accumulation periods, currency effects tend to average out, but in the short term they can create meaningful variance.

Q: How do I hedge currency risk as an expat?
A: Practical hedging for individual expats means holding cash and assets across multiple currencies, timing large transfers when rates are favourable, and using forward contracts for known obligations. Formal FX hedging instruments are typically cost-prohibitive for retail amounts. The structural answer is to build a portfolio that spans jurisdictions and currencies by design.