MYR/USD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Malaysian central bank maintains its overnight policy rate at 2.75%, which is more stable compared to the anticipated rate cuts by the US Federal Reserve.
• Risk/commodities: Oil prices are near recent highs and have been volatile, which supports the ringgit due to Malaysia's status as a significant oil exporter.
• One macro factor: Malaysia's economy shows resilience with positive projections for growth, influenced by strong performance from key trading partners like China.
Range: The MYR/USD is expected to drift within its recent 3-month range, as the current momentum may not push it towards extremes.
What could change it:
• Upside risk: A significant decline in US economic indicators or geopolitical tension could further pressure the USD.
• Downside risk: Unexpected strengthening of the USD due to positive US economic news or aggressive Fed policy changes could influence the MYR negatively.