GBP/MYR Outlook:
Bearish, as the rate is below its recent average and near recent lows, weighed down by weak economic signals.
Key drivers:
• Rate gap: The Bank of England's recent dovish policy hints at potential rate cuts, contrasting with Malaysia's steady economic growth and fiscal discipline.
• Risk/commodities: The current strength of the Malaysian Ringgit is supported by a weaker US dollar, which is bolstered by the recent interest rate cuts by the Federal Reserve.
• One macro factor: Malaysia’s resilient GDP growth, driven by domestic consumption and exports, contrasts with uncertainty around the UK's economic indicators.
Range:
Expect GBP/MYR to remain stable within its recent 3-month range, but with potential downward pressure.
What could change it:
• Upside risk: A stronger-than-expected UK GDP growth report could bolster the pound.
• Downside risk: Continued political uncertainty in the UK may exert further pressure on the pound.