MYR/EUR Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average and within the mid-range of past three months.
Key drivers:
• Rate gap: The Central Bank of Malaysia continues to offer competitive interest rates compared to the European Central Bank, supporting the MYR.
• Risk/commodities: Oil prices are near recent highs, positively impacting the MYR due to Malaysia's export strength in commodities like palm oil.
• One macro factor: Malaysia's GDP growth is projected strong, enhancing investor confidence in the MYR.
Range: The MYR/EUR pair is likely to hold its current position, possibly drifting within a stable range, lacking significant catalysts for dramatic movement.
What could change it:
• Upside risk: A significant rebound in global oil prices could strengthen the MYR further against the EUR.
• Downside risk: A sharp deterioration in the Eurozone's economic prospects could weigh down on the EUR, affecting the MYR's performance.