Current market bias for GBP to MYR is bullish, as the pound has recently strengthened due to hawkish signals from the Bank of England (BoE).
Key drivers include the interest rate differential, with the BoE expected to tighten monetary policy less aggressively than earlier anticipated, potentially lowering rates to 3.25% while inflation eases. Additionally, Malaysia’s economy displays strong fundamentals, with a narrowing fiscal deficit and positive GDP growth trends that support the Malaysian Ringgit (MYR). In terms of macroeconomic factors, the UK has seen improvements in retail sales, which could provide further support for the pound.
In the near term, GBP to MYR is expected to trade within a stable range, reflecting the recent performance near 14-day highs while remaining close to its 3-month average.
Potential upside risks to this forecast include any unexpected increases in UK retail sales or stronger than anticipated growth in the UK economy. Conversely, downside risks could arise from further interest rate cuts by the BoE or concerning fiscal developments that may dampen investor confidence in the pound.
