MYR/TWD Outlook: The outlook for the MYR against the TWD is bullish, as it is trading above its recent average and near recent highs, supported by strong macroeconomic factors.
Key drivers:
• Rate gap: The Bank Negara Malaysia's recent rate cuts could lead to a stronger MYR as it contrasts with potential stability in Taiwan's monetary policy.
• Risk/commodities: The rise in oil prices, currently at recent highs, positively impacts Malaysia’s export-driven economy, bolstering the MYR.
• One macro factor: Malaysia’s projected GDP growth of over 5% for 2025 enhances investor confidence, further supporting the MYR.
Range: The MYR/TWD pair is likely to drift within its recent range, testing its upper extremes as the MYR remains supported.
What could change it:
• Upside risk: A significant increase in foreign direct investment in Malaysia's technology sector could strengthen the MYR further.
• Downside risk: A sharp decline in global oil prices could negatively impact the MYR given its reliance on commodity exports.