MYR/CNY Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear driving force.
Key drivers:
• Rate gap: The Malaysian central bank's recent easing supports the MYR, while China's measures to lower interest rates are aimed at stimulating the economy, which may limit the CNY's strength.
• Risk/commodities: Oil prices remain high, which generally supports the MYR as Malaysia is a net exporter of oil. However, volatility in oil pricing could create uncertainty.
• Macro factor: Malaysia's robust GDP growth suggests economic resilience, supporting the MYR despite mixed signals from the global economy.
Range:
MYR/CNY is likely to hold within its recent range, as it has traded steadily just above the historic average.
What could change it:
• Upside risk: Stronger oil prices could provide more support for the MYR, potentially boosting its value.
• Downside risk: A significant downturn in China's economy could increase pressure on the CNY, impacting MYR/CNY rates negatively.
