MYR/USD Outlook: The outlook for the MYR against the USD is bullish, as the rate is significantly above its 90-day average and near recent highs, supported by strong domestic economic performance.
Key drivers:
• Rate gap: The Federal Reserve's anticipated interest rate cuts are weakening the USD, while Malaysia’s economy shows resilience and growth.
• Risk/commodities: Rising oil prices are boosting Malaysia’s trade surplus, which supports the MYR significantly.
• One macro factor: Foreign direct investment inflows in technology and green energy are enhancing demand for the MYR.
Range: The MYR/USD is likely to hold within its recent trading range, with a potential to drift higher if conditions remain favorable.
What could change it:
• Upside risk: A stronger-than-expected economic report from Malaysia could further support the MYR.
• Downside risk: Heightened geopolitical tensions involving the US might drive instability in the USD.