USD/MYR Outlook:
Bearish, as the rate is below its recent average and near its recent lows, pressured by dollar weakness.
Key drivers:
• Rate gap: The U.S. Federal Reserve's decision to hold interest rates steady while the Malaysian economy shows resilience has led to a weaker dollar compared to the MYR.
• Risk/commodities: Oil prices are currently at 7-day lows but remain above their recent average, which typically supports the MYR as Malaysia is a net exporter of oil.
• One macro factor: Malaysia's GDP growth at 5.2% in the third quarter of 2025 highlights its strong economic performance amid tightening fiscal conditions.
Range:
The USD/MYR is likely to drift within its recent range, reflecting the current bearish outlook.
What could change it:
• Upside risk: A surprising recovery in U.S. economic data could strengthen the dollar.
• Downside risk: Continued geopolitical tensions could drive even more investors away from U.S. assets, further weakening the dollar.