Bias: The MYR is currently near the 90-day average and sits within the middle of the 3-month range, indicating a range-bound outlook.
Key drivers:
• Rate gap: The Bank of Malaysia is maintaining a stable policy stance, while the Bank of Thailand has recently cut rates to stimulate its economy.
• Risk/commodities: Oil prices are currently above their 3-month average, which could support the MYR through increased commodity exports.
• One macro factor: Malaysia's GDP growth is robust at 5.1%, which strengthens investor confidence in the MYR.
Range: Expect the MYR/THB to hold steady within the current range, possibly testing the upper or lower extremes as market reactions fluctuate.
What could change it:
• Upside risk: A sustained rise in oil prices could further boost the MYR’s position.
• Downside risk: Sluggish economic growth in Thailand may weaken the THB, impacting the MYR/THB exchange rate adversely.