The market bias for the HKD to MYR exchange rate is currently bearish.
Key drivers include:
- The stable interest rate outlook from the Hong Kong Monetary Authority (HKMA) contrasts with Malaysia's favorable economic conditions and potential interest rate cuts in the US, which could narrow rate differentials and favor the MYR.
- Positive economic fundamentals in Malaysia and fiscal reforms are expected to bolster the MYR's value.
- Global trends in reducing reliance on the US dollar may also support the MYR, making it more attractive for investments.
The near-term trading range for HKD to MYR appears to be relatively tight, reflecting recent lows and a stable range over the past three months.
An upside risk could arise if global oil prices recover, benefiting the MYR due to Malaysia's reliance on oil exports. Conversely, a downside risk might stem from significant volatility in global markets, potentially harming both currencies.