Bias: bearish-to-range-bound, as the USD is below the 90-day average and in the lower half of the 3-month range.
Key drivers:
• Rate gap: The expected interest rate cuts from the Federal Reserve may weaken the USD against the MYR, which is supported by Malaysia's resilient economy.
• Risk/commodities: Oil prices are currently above average, which can provide a boost to the MYR due to Malaysia's reliance on oil exports.
• One macro factor: Malaysia's projected GDP growth of 5.1% in 2025 is strengthening investor confidence in the MYR.
Range: The USD/MYR pair is likely to drift within the recent 3-month range, reflecting ongoing volatility.
What could change it:
• Upside risk: A significant rebound in US economic data could strengthen the USD.
• Downside risk: Continued dovish signals from the Federal Reserve could further weaken the USD against the MYR.