Bias: Bullish-to-range-bound, as the MYR is above the 90-day average and trading in the upper half of its 3-month range.
Key drivers:
• Rate gap: The Bank Negara Malaysia's stable monetary policy contrasts with the continued zero interest rates in Hong Kong, weakening the HKD against the MYR.
• Risk/commodities: The recent increase in crude oil prices supports Malaysia’s economy, positively reflecting on the MYR owing to its role as a significant oil exporter.
• Macro factor: Malaysia's economic resilience, with strong GDP growth projected for 2025, reinforces investor confidence in the MYR.
Range: Expect MYR/HKD movement to hold steady within the recent range, influenced by these strong fundamentals and ongoing market dynamics.
What could change it:
• Upside risk: A significant rise in oil prices might strengthen the MYR further.
• Downside risk: Continued HKD interventions could pressure the MYR if they lead to heightened market volatility.