The market bias for USD to MYR is currently bearish.
Key drivers include the narrowing interest rate differential between the U.S. and Malaysia, as anticipated Fed rate cuts may favor the MYR. Moreover, Malaysia's strong economic fundamentals—including robust GDP growth and fiscal reforms—are expected to support the MYR's performance. Additionally, global trends to reduce reliance on the USD may enhance the MYR's attractiveness among investors.
In the near term, expectations suggest the exchange rate could remain within a stable range influenced by current price volatility.
Upside risks could arise from unexpected resilience in the U.S. economy or sudden shifts in global commodity prices, particularly oil, which has recently shown volatility. Conversely, a significant deterioration in Malaysia's economic outlook or abrupt changes in oil prices could negatively impact the MYR, putting downward pressure on its strength relative to the USD.
