EUR/MYR Outlook:
The EUR/MYR exchange rate is likely to decrease as it is currently trading 2.4% below the recent average and is near recent lows, pressured by weaker economic indicators in the Eurozone.
Key drivers:
• Rate gap: The European Central Bank's accommodative policy contrasts with Bank Negara Malaysia's stable monetary stance, supporting the MYR.
• Risk/commodities: Oil prices have increased substantially, which tends to support the MYR due to its ties to the energy market.
• One macro factor: The Eurozone's production indicators have shown weaker performance, dampening the outlook for the euro.
Range:
The EUR/MYR rate is likely to drift within its recent range, exhibiting some volatility as it approaches lower levels.
What could change it:
• Upside risk: A stronger-than-expected recovery in Eurozone economic indicators might boost the euro.
• Downside risk: Continued strength in Malaysian economic data or rising oil prices could further pressure the euro against the MYR.
