GBP/MYR Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by economic data from both regions.
Key drivers:
• Rate gap: The Bank of England is expected to lower rates, while Bank Negara Malaysia maintains a stable policy with no anticipated changes to interest rates in the near term.
• Risk/commodities: Oil prices are currently above average, positively impacting the MYR due to Malaysia's status as an oil-exporting country.
• One macro factor: Malaysia's healthy economic growth and integration into the AI supply chain have bolstered investor confidence, leading to the ringgit's appreciation.
Range: The GBP/MYR is likely to drift sideways within its recent range, with limited movement expected.
What could change it:
• Upside risk: A stronger-than-expected recovery in UK manufacturing could boost the GBP.
• Downside risk: If oil prices decline significantly, it might weaken the MYR, putting further downward pressure on the GBP/MYR rate.