The Canadian dollar (CAD) is currently facing headwinds, primarily due to declining oil prices that have weakened its value. Recent reports indicate that the CAD has fallen to 90-day lows near 2.9794 MYR, which is approximately 1.8% lower than its three-month average of 3.0351 MYR. Analysts suggest that the CAD's performance is closely linked to fluctuations in crude oil prices, a critical factor given that Canada is one of the world's largest oil exporters. Current oil prices are around USD 64.44, which is 2.3% below their three-month average amid concerns over global oversupply and U.S.-China trade tensions.
Market sentiment has also been influenced by central bank policies. Following recent comments from Federal Reserve Chair Jerome Powell regarding potential rate cuts in the U.S., the CAD experienced a brief stabilization against the U.S. dollar. However, ongoing issues such as trade negotiations with the U.S. and the Bank of Canada’s decision to lower its key interest rate to 2.5%—the lowest in three years—have introduced further volatility for the loonie.
In contrast, the Malaysian ringgit (MYR) has shown resilience supported by stable economic fundamentals. The MYR has benefited from the Federal Reserve's rate-cutting cycle, which has led to a softer U.S. dollar. Analysts highlight Malaysia's positive economic indicators, including steady GDP growth and a trade surplus of MYR 16.1 billion, which together bolster investor confidence in the MYR. Moreover, Bank Negara Malaysia’s stance of maintaining the Overnight Policy Rate at 3.00% reflects a cautious approach amidst external uncertainties.
Overall, the CAD/MYR exchange rate outlook may hinge on oil market trends and ongoing geopolitical developments. As long as oil prices remain under pressure, the CAD could continue to struggle, potentially leading to a further depreciation against the MYR unless offset by positive macroeconomic developments or shifts in monetary policy in Canada. Investors should keep an eye on these dynamics as they could significantly influence exchange rates in the coming weeks.
