AUD/MYR Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average, yet lacks a clear driver for significant movement.
Key drivers:
• Rate gap: The Reserve Bank of Australia is considering potential rate hikes, while Bank Negara Malaysia maintains a steady stance on rates, providing a favorable comparison for the AUD.
• Risk/commodities: Recent strength in oil prices supports the Malaysian Ringgit through its commodity exports, elevating the overall economic outlook for Malaysia.
• One macro factor: Upcoming Australian economic indicators, such as the Consumer Price Index, will be closely watched for insights into inflation and potential monetary policy changes.
Range: Expect the AUD/MYR to hold within its recent 3-month range, favoring stability given the mixed signals affecting both currencies.
What could change it:
• Upside risk: A continued increase in demand for Australian exports, particularly if China’s economic recovery strengthens.
• Downside risk: A significant drop in oil prices could negatively affect the MYR, creating downward pressure on the AUD/MYR exchange rate.
