MYR/SGD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average without a clear driver for significant movement.
Key drivers:
• Rate gap: The Bank Negara Malaysia’s recent rate approach contrasts with the Monetary Authority of Singapore’s easing, supporting the MYR.
• Risk/commodities: The current high oil prices provide an advantage to Malaysia's economy, bolstering demand for the MYR.
• One macro factor: Malaysia’s strong GDP growth suggests economic resilience, favorable for the MYR's performance.
Range:
Expect MYR/SGD to hold within its recent 3-month range as it stabilizes above average levels.
What could change it:
• Upside risk: A shift in US Federal Reserve policy that leads to further USD weakness could support the MYR.
• Downside risk: Increased geopolitical tensions affecting trade could pressure the MYR against the SGD.