Bias: The GBP/MYR exchange rate is currently bearish-to-range-bound, as it sits below the 90-day average and within the lower half of its recent 3-month range.
Key drivers:
• Rate gap: The Bank of England's cautious approach to potential rate cuts contrasts with Malaysia's relative economic resilience, which may affect GBP's performance against the MYR.
• Risk/commodities: With oil prices currently above average, this could sustain Malaysia's trade surplus, supporting the MYR, especially given its links to commodity exports.
• One macro factor: Malaysia's strong GDP growth projection, expected to be around 5.1%, boosts investor confidence in the MYR.
Range: The GBP/MYR pair may drift within the recent range, as fluctuations in broader market trends and ongoing economic factors influence movements.
What could change it:
• Upside risk: A sudden increase in UK economic data could lead to GBP appreciation against MYR.
• Downside risk: A significant drop in oil prices could weaken the MYR, negatively impacting GBP/MYR.