The exchange rate forecast for EUR to MYR reflects a complex interplay of geopolitical, economic, and monetary factors that have recently influenced both currencies. The euro (EUR) has seen signs of weakening, particularly in response to comments from European Central Bank (ECB) President Christine Lagarde, highlighting vulnerabilities in the Eurozone's economy. The ECB's dovish shift, with expectations of a potential interest rate cut by late 2025, is creating a narrower interest rate differential with the U.S., which could weigh further on the euro. Recently, the EUR’s trading levels indicate it is approximately 2.0% below its 3-month average, hovering around 4.7960 MYR.
In contrast, the Malaysian Ringgit (MYR) has performed strongly, reaching a 13-month high, driven by promising economic indicators and stable monetary policy established by Bank Negara Malaysia. The Ringgit's strength has been supported by positive GDP growth and strategic trade agreements resulting from the recent ASEAN Summit. Market analysts indicate that these favorable conditions may contribute to continued support for the MYR in the near term.
Furthermore, the fluctuations in oil prices could also impact the EUR to MYR rate. Currently, oil is trading at 30-day lows and 4.8% below its 3-month average. Given that the Eurozone is a significant energy consumer, a sustained decline in oil prices may mitigate inflation pressure, potentially impacting the ECB's monetary policy stance and reinforcing the euro's relative weakness against the MYR.
As the market looks ahead, analysts suggest that both the euro's outlook and the Ringgit's recent strength will hinge on ongoing economic data and political developments. EUR stability may depend on improvements in the Eurozone's economic prospects and investor confidence, while the MYR could continue to benefit from positive growth and trade outcomes. The interplay of these factors will remain crucial for businesses and individuals involved in international transactions.
