The market bias for the MYR to HKD exchange rate is currently bullish.
Key drivers include the narrowing interest rate differential, as Malaysia's economic reforms and growth outlook support the Malaysian Ringgit (MYR). In contrast, the Hong Kong Dollar (HKD) is expected to remain stable due to the Hong Kong Monetary Authority's steady policy rate. Additionally, recent improvements in Malaysia's fiscal position, including a reduced deficit, may strengthen the MYR further.
In the near term, the MYR/HKD exchange rate is expected to trade within a range that is moderately above its recent average, driven by positive economic sentiment and external factors.
An upside risk to this outlook could stem from further increases in oil prices, which support Malaysia’s export revenue. Conversely, a downside risk might arise if global economic uncertainty leads to increased demand for safe-haven currencies like the HKD.