USD/MYR Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by ongoing tariff concerns and US Federal Reserve policy shifts.
Key drivers:
• Rate gap: The Federal Reserve is expected to cut interest rates, which has weakened the US dollar against the Malaysian ringgit.
• Risk/commodities: Oil prices are currently above average, which supports the MYR as Malaysia benefits from its commodity exports.
• One macro factor: Malaysia's economy is projected to grow robustly, bolstering investor confidence in the MYR.
Range: The USD/MYR is likely to drift within its recent range, facing downward pressure as concerns about US tariffs dominate.
What could change it:
• Upside risk: A significant resurgence in US economic data could strengthen the USD.
• Downside risk: Continued tariff disputes or further rate cuts from the Federal Reserve could drive the USD lower.