EUR/MYR Outlook:
The EUR/MYR exchange rate is likely to decrease as it is currently trading significantly below its recent average and is near recent lows. Economic pressures in the Eurozone have contributed to this bearish trend.
Key drivers:
• Rate gap: The European Central Bank's cautious stance on interest rates contrasts with Malaysia's maintained rates, supporting the MYR.
• Risk/commodities: Rising oil prices have strengthened the MYR, as Malaysia benefits from its status as a net exporter of oil, while the Euro is pressured by overall economic uncertainties.
• One macro factor: Weak German consumer confidence has raised concerns about the Eurozone's economic outlook, adding downward pressure to the euro.
Range:
The EUR/MYR is likely to drift within a stable range, given its current position well below its recent average.
What could change it:
• Upside risk: A significant improvement in Eurozone economic data could bolster the euro.
• Downside risk: Further deterioration in economic indicators from Germany could pressure the euro lower.
