KUALA LUMPUR: The US dollar is expected to weaken in the next six to 12 months, and Standard Chartered Wealth Solutions Chief Investment Office (CIO) outlines a constructive, albeit volatile second half of 2025 in its recently published Global Market Outlook report.
The bank views the weakening greenback outlook as a key market driver alongside an anticipated policy easing and supportive global conditions.
Against this backdrop, the bank has identified three key themes for investors to consider during the second half of the year, namely an overweight position in global equities, with a tilt towards Asia ex-Japan.
The bank also highlighted a preference for US dollar bonds with maturities of 5 to 7 years, as well as emerging market (EM) local currency bonds, citing the recent weakness of the US dollar as a key factor driving this strategy.
Gold and alternative investment strategies are seen as attractive options for enhancing portfolio diversification.
Taking into consideration the end of US’ 90-day tariff pause in July, as well as global geopolitical conflicts, the bank also identified several risks that merit close attention and will most likely result in temporary volatility.
Standard Chartered noted that key risks to the global economic outlook include a sustained rise in trade tariffs, a sharp increase in oil prices driven by geopolitical events, and a sudden decline in US economic data that could point toward a potential recession.
Standard Chartered Malaysia head of wealth and retail banking Harmander Mahal said the second quarter marked a pivotal moment for investors.
“Despite ongoing global trade shifts and geopolitical tensions, global equities remained robust, rising approximately 8 -10% quarter-to-date.
“This reflects sustained investor confidence and a re-acceleration in risk appetite, particularly across Asia, where emerging markets benefited from stronger capital inflows and currency tailwinds.
“Malaysia continues to demonstrate resilience amid global uncertainty, with our 2025 growth forecast maintained at 4.2% and the ringgit emerging as the region’s better-performing currencies against the US dollar – signalling strong investment sentiment,“ he said.
In addition to its leadership role as Asean Chair 2025, Harmander said Malaysia is well-positioned to unlock further growth opportunities based on the bank’s outlook for the year, as structural reforms take shape and strategic initiatives, such as the Special Economic Zones gain momentum.
