The current exchange rate for MYR to GBP stands at 0.1763, slightly above its three-month average, reflecting a relatively stable range of 0.1732 to 0.1782. Analysts attributed the stability to various economic factors influencing both currencies. The British pound (GBP) remains under pressure due to budget uncertainties and upcoming fiscal announcements from Chancellor Rachel Reeves, which are causing investors to adopt a cautious stance. The potential abolishment of the two-child cap on child benefits has raised concerns regarding the government’s ability to fund its commitments. Observations of GBP are centered on upcoming comments from the Bank of England (BoE) Governor Andrew Bailey, whose hawkish remarks could provide some support to the pound.
In contrast, developments in Malaysia have seen the ringgit (MYR) impacted by the recent interest rate cut by Bank Negara Malaysia (BNM), which lowered the Overnight Policy Rate by 25 basis points to 2.75%. This significant shift marks the first rate cut in five years and reflects concerns over economic growth amid global uncertainties. The rate cut is expected to bolster economic activity, despite challenges posed by U.S. tariffs on Malaysian exports. Economists predict a strengthening of the MYR against the U.S. dollar, which could have secondary effects on its value against GBP as external pressures soften.
Moreover, fluctuations in oil prices, which significantly influence the Malaysian economy, remain a consideration. Currently, crude oil is trading at 64.53 USD, which is 5.0% below its three-month average. With oil prices exhibiting a volatile trading range, further shifts could affect the MYR's performance.
Overall, the forecasts suggest a cautious outlook for GBP due to domestic fiscal concerns, while the MYR may experience further strengthening contingent upon economic recovery and external factors like oil prices. Stakeholders in international transactions should closely monitor these developments to navigate the currency market effectively.
