Bias: The MYR/EUR is bullish-to-range-bound, currently above the 90-day average and situated in the upper half of the 3-month range.
Key drivers:
• Rate gap: The Malaysian central bank's more accommodating monetary policy relative to the European Central Bank is fostering a stronger MYR against the EUR.
• Risk/commodities: With oil prices currently above their 3-month average, this positive trend supports the MYR due to Malaysia’s reliance on oil exports.
• Eurozone economic concerns: Recent disappointing trade and retail data from Germany are raising doubts about the euro's strength, adding pressure on the currency.
Range: The pair is likely to hold steady or drift slightly within the recent range, maintaining its current position.
What could change it:
• Upside risk: A significant boost in commodity prices could further strengthen the MYR against the EUR.
• Downside risk: A deterioration in Malaysia's economic outlook could weaken investor confidence and the MYR.