MYR/EUR Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Bank Negara Malaysia maintains a stable overnight policy rate, while the European Central Bank is contemplating easing measures, supporting the Malaysian Ringgit.
• Risk/commodities: Brent Crude OIL/USD prices are at recent highs, which often strengthens the MYR as Malaysia is a net oil exporter, but the EUR remains pressured by ongoing uncertainty in the Eurozone.
• One macro factor: The Eurozone is facing potential GDP slowdown risks, which could impact the euro's strength in the short term.
Range: The MYR/EUR is likely to hold its ground within the current range as both currencies adjust to external developments.
What could change it:
• Upside risk: An unexpected strengthening in Eurozone economic data could boost the euro.
• Downside risk: Continued geopolitical tensions or a significant decline in oil prices could weaken the MYR.
