MYR/VND Outlook: The outlook for the MYR against the VND is likely to increase, as the rate is currently trading at 90-day highs and significantly above its recent average.
Key drivers:
- Rate gap: The Malaysian central bank has maintained a more supportive environment for the MYR compared to Vietnam's more cautious monetary approach.
- Risk/commodities: With oil prices at recent highs, the demand for Malaysia's commodity exports, including oil, is bolstered, supporting the MYR.
- One macro factor: Malaysia's resilient GDP growth forecast of 5.1% has enhanced investor confidence in the MYR.
Range: The MYR/VND is likely to drift within the recent range as it tests upper boundaries.
What could change it:
- Upside risk: A significant rise in global oil prices could further strengthen the MYR.
- Downside risk: Any unexpected policy shifts from the Vietnamese government that impact the VND could lead to depreciation against the MYR.