MYR/GBP Outlook: Slightly positive, but likely to move sideways, as it is above its recent average but lacks a strong driver for significant movement.
Key drivers:
• Rate gap: Bank Negara Malaysia has maintained its policy rate, which enhances the MYR's appeal compared to a more cautious Bank of England.
• Risk/commodities: Oil prices are currently high and volatile, which typically supports the MYR due to Malaysia’s status as a significant oil exporter.
• One macro factor: The continued economic resilience in Malaysia, bolstered by positive growth projections from key trading partners like China, supports the ringgit’s strength.
Range: The MYR/GBP is likely to hold steady within its recent 3-month range, potentially drifting as it maintains its current levels.
What could change it:
• Upside risk: A surprising increase in UK inflation could pressure the BoE to change its interest rate stance.
• Downside risk: Unforeseen political instability in the UK could lead to decreased confidence and volatility in the GBP.
