MYR/THB Outlook:
Slightly positive, but likely to move sideways; the MYR is currently above its average, while traders are watching key developments.
Key drivers:
• Rate gap: The Bank of Malaysia remains supportive while the Bank of Thailand tries to control a rising baht, affecting the relative strength of each currency.
• Risk/commodities: Oil prices are significantly above average, which supports the MYR, as Malaysia is an oil exporter.
• Economic performance: Malaysia's GDP growth is healthy, showing resilience, which further strengthens confidence in the MYR.
Range:
The MYR/THB is likely to drift within its recent range, influenced by fluctuating economic conditions and currency movements.
What could change it:
• Upside risk: Stronger-than-expected foreign investment inflows into Malaysia could boost the MYR.
• Downside risk: Any aggressive moves by the Bank of Thailand could put upward pressure on the THB, countering MYR gains.