CAD/MYR Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by weak oil prices and trade uncertainties.
Key drivers:
• Rate gap: The Bank of Canada's recent interest rate cut aims to balance growth and inflation, while Malaysia's economy shows resilience, maintaining positive momentum for the MYR.
• Risk/commodities: Oil prices have softened, recently trading below average, which typically weakens the CAD due to reduced revenue from Canadian oil exports.
• One macro factor: Economic uncertainty from U.S. tariffs on Canadian goods has impacted Canadian exports, contributing to depreciation of the CAD.
Range: The CAD/MYR rate is likely to drift as it operates near the lower end of its recent three-month range.
What could change it:
• Upside risk: A significant rebound in oil prices could support the CAD.
• Downside risk: Continued trade policy uncertainties could further weaken the CAD against the MYR.