Bias: Bullish-to-range-bound, as the MYR is above the 90-day average and in the upper half of the 3-month range.
Key drivers:
- Rate gap: The Bank of England is expected to cut rates while the Malaysian central bank maintains a stable stance, supporting the MYR.
- Risk/commodities: Rising oil prices are boosting Malaysian commodity exports, strengthening demand for the MYR.
- One macro factor: Malaysia's projected GDP growth of 5.1% is enhancing investor confidence in the MYR.
Range: Movement in the MYR/GBP pair is likely to hold within the recent range, with potential for slight gains due to supportive fundamentals.
What could change it:
- Upside risk: A faster-than-expected recovery in the UK economy could drive GBP higher against the MYR.
- Downside risk: A significant drop in oil prices could weaken the MYR and impact its pairing with the GBP.