GBP/MYR Outlook:
Bearish, as the rate is below its recent average and nearing recent lows, with limited drivers supporting the pound.
Key drivers:
• Rate gap: The Bank of England's dovish stance contrasts with the more robust policies observed from the Malaysian central bank, putting pressure on the GBP.
• Risk/commodities: The US dollar's weakness is supporting the MYR, while rising oil prices can boost Malaysia's economy given its ties to the energy sector.
• One macro factor: The Malaysian economy's resilience, with GDP growth at 5.2%, enhances the MYR's position against the GBP.
Range:
The GBP/MYR is likely to drift within its recent range, reflecting stability but leaning towards the lower end.
What could change it:
• Upside risk: A surprising shift in BoE policy could strengthen the pound.
• Downside risk: Continued weakness in the UK economic indicators could further weaken the GBP.