The GBP to MYR exchange rate shows a bearish bias in the near term.
Key drivers include the expectation that the Bank of England will lower interest rates to 3.25% as inflation decreases, narrowing the interest rate differential between the UK and Malaysia. Additionally, Malaysia's strong GDP growth and improving fiscal position may bolster the MYR. The UK's fiscal concerns could further pressure the GBP.
The expected trading range for GBP/MYR over the next few months could reflect a stable move, fluctuating within a tight band as seen recently. The rate is currently just below its three-month average, indicating consistent trading behavior.
An upside risk could emerge if Malaysia experiences unforeseen economic growth, while a downside risk may stem from renewed fiscal anxieties in the UK impacting the GBP negatively. Oil prices, fluctuating significantly, may also play a role in MYR valuation, influencing international trade and investor sentiment.