USD/MYR Outlook: Bearish, as the rate is below its recent average and near recent lows, impacted by tariff concerns. Key drivers:
• Rate gap: The Federal Reserve's intended rate cuts are expected to weaken the USD, contrasting with Malaysia’s stable economic outlook supporting the MYR.
• Risk/commodities: Elevated oil prices, trading above average, typically support the MYR, as Malaysia is a significant exporter of commodities.
• One macro factor: Malaysia's resilient GDP growth projection and improving trade surplus have enhanced confidence in the MYR.
Range: The USD/MYR is likely to drift within its recent range, as external pressures lead to fluctuations but limited significant movement.
What could change it:
• Upside risk: A shift towards stronger US economic data that leads to renewed USD demand could strengthen the currency.
• Downside risk: Continued geopolitical tensions or further tariff announcements could pressure the USD lower against the MYR.