AUD/MYR Outlook:
The AUD/MYR exchange rate is currently above its recent average and tests the higher end of its 3-month range, signalling a slightly positive outlook. However, risk factors from geopolitical tensions weigh on the 'Aussie,' suggesting a hold in the near term.
Key drivers:
• Rate gap: The Reserve Bank of Australia has a more hawkish stance compared to Bank Negara Malaysia's stable interest rates, increasing the AUD's appeal against the MYR.
• Risk/commodities: Rising oil prices strain Australia's terms of trade, as it is a net energy importer, further impacting the AUD negatively.
• One macro factor: Upcoming GDP growth forecasts from Australia could boost AUD demand if they surpass expectations.
Range:
Expect the AUD/MYR to hold steady within the recent range, with potential testing of extremes depending on geopolitical developments.
What could change it:
• Upside risk: Strong Australian GDP growth figures could increase the AUD's appeal.
• Downside risk: Continued geopolitical tensions may deepen risk aversion, leading to a decline in the AUD.
