GBP/MYR Outlook: Slightly negative, but likely to move sideways, as the rate is just below its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Bank of England's cautious stance contrasts with Bank Negara Malaysia's steady policy, which has helped strengthen the ringgit.
- Risk/commodities: Recent oil prices are at 90-day highs, which positively impacts the Malaysian economy and supports the MYR.
- One macro factor: UK inflation remains persistent, limiting the Bank of England's ability to cut interest rates which, in turn, affects the GBP.
Range: GBP/MYR is likely to drift within its recent range, staying stable given the lack of significant new developments.
What could change it:
- Upside risk: A stronger-than-expected UK economic performance could bolster the pound.
- Downside risk: An increase in political uncertainty in the UK might lead to decreased confidence in the GBP.