USD/MYR Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by significant economic concerns in the US.
Key drivers:
- Rate gap: The Federal Reserve's expected interest rate cuts are weakening the US dollar against the Malaysian ringgit.
- Risk/commodities: Oil prices are currently at highs, positively impacting the MYR due to its strong connection with commodity exports like palm oil and electronics.
- One macro factor: Malaysia's projected GDP growth of 5.1% indicates economic resilience, further supporting confidence in the MYR.
Range: The USD/MYR pair is likely to drift lower within its recent range, facing selling pressure as economic fundamentals shift.
What could change it:
- Upside risk: A significant improvement in US economic data could strengthen the USD.
- Downside risk: Escalating geopolitical tensions could further devalue the USD amidst ongoing uncertainties.