MYR/TWD Outlook:
The MYR is currently trading above its recent average and is near recent highs, driven by strong economic growth and stable monetary policy. This suggests a likely increase in MYR/TWD in the near term.
Key drivers:
• Rate gap: Malaysia's central bank maintains a higher interest rate compared to Taiwan, supporting demand for the MYR.
• Risk/commodities: With oil prices climbing significantly above average, Malaysia’s economy benefits, boosting the MYR.
• One macro factor: The robust expansion of the Malaysian construction sector by over 10% year-on-year significantly enhances overall economic strength.
Range:
The MYR/TWD is likely to hold near current highs, potentially testing upper extremes as demand remains strong.
What could change it:
• Upside risk: A further increase in global oil prices could enhance MYR strength even more.
• Downside risk: Any sudden shifts in regional economic conditions could pressure the MYR lower.