Bias: The MYR/USD pair is bullish-to-range-bound, as it is above the 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The US Federal Reserve's expected interest rate cuts may weaken the USD compared to the MYR, supporting the ringgit's strength.
• Risk/commodities: Oil prices are currently above their 3-month average, boosting Malaysia's export revenues and strengthening the MYR.
• One macro factor: Malaysia's economic resilience, with projected GDP growth of over 5%, is enhancing investor confidence in the MYR.
Range: The MYR/USD pair is likely to hold steady within the recent range as factors supporting the MYR counterbalance USD strengthening pressures.
What could change it:
• Upside risk: A surprise announcement from the Federal Reserve signaling fewer rate cuts could further boost the USD.
• Downside risk: Escalation of geopolitical tensions involving the US could lead to increased volatility in the USD, negatively impacting the MYR.