The GBP to MYR exchange rate has shown some recent fluctuations, currently hovering near 14-day lows at 5.7097, which is approximately 0.7% below its three-month average of 5.7491. Analysts note that the GBP has seen a modest recovery following recent political backing for Chancellor Rachel Reeves from Prime Minister Kier Starmer. While this has provided some support for the pound, concerns over fiscal risks in the UK persist, limiting the scope of its recovery.
The British pound is significantly influenced by a combination of domestic economic performance and political stability. Recent tariff measures imposed by the US on both the UK and Malaysia may heighten volatility in the GBP/MYR pair. Specifically, a 10% reciprocal tariff on UK goods and a staggering 24% on Malaysian imports could overshadow other economic indicators, with trade dynamics becoming central to market sentiment.
On the Malaysian ringgit front, the response to US tariffs has been one of restraint, as Malaysia seeks to collaborate regionally rather than engage in a tit-for-tat tariff war. The broader outlook for emerging Asian currencies, including the MYR, has become more pessimistic due to escalating concerns over a global trade war, with recent trends indicating a drop in risk appetite among investors.
Oil prices also play a crucial role in shaping the MYR, with current levels at $69.21, approximately 2.9% above its three-month average of $67.23. Given Malaysia's status as a significant oil exporter, fluctuations in oil prices typically exert a notable impact on the MYR's strength. Volatility in oil markets, demonstrated by a 31.1% trading range from $60.14 to $78.85, suggests that the MYR will continue to react to both local economic developments and global energy market trends.
In summary, the GBP/MYR exchange rate remains under pressure from external trade issues and internal economic signals. Market participants should pay close attention to upcoming UK economic data, Bank of England policy updates, and developments in US-Malaysia trade relations, as all will play a critical role in shaping future currency movements.