MYR/CNY Outlook: Slightly positive, but likely to move sideways as the rate is currently above its recent average and near its 90-day highs.
Key drivers:
• Rate gap: The Malaysian central bank's supportive stance amid a stable economy contrasts with the People's Bank of China's efforts to stabilize the yuan against recent pressures.
• Risk/commodities: Oil prices are at 90-day highs, which supports the MYR due to Malaysia's reliance on oil revenues for its exports.
• One macro factor: Malaysia's GDP growth projections for 2025 indicate strong economic resilience, enhancing investor confidence in the MYR.
Range: The MYR/CNY is likely to remain stable within its recent 3-month range without attempting to test extremes.
What could change it:
• Upside risk: A significant drop in US interest rates could further strengthen the MYR.
• Downside risk: Renewed pressure on the Chinese yuan due to worsening economic signals could negatively impact the MYR.