Bias: Bearish-to-range-bound: the pair sits below the 90-day average and near the lower end of the last three months' range.
Key drivers:
- Rate gap: The Fed is seen moving toward rate cuts in 2026, narrowing the yield gap with Bank Negara Malaysia and supporting the MYR as markets price in easing.
- Oil trend: Oil trades near multi-month highs with volatility; higher oil supports Malaysia’s export income and adds a floor to USD/MYR moves.
- Macro: Upcoming US payrolls and unemployment data will influence Fed timing; a softer print could push the USD lower, aiding MYR.
Range: USD/MYR is likely to drift within its 3-month band, with a mild tilt toward testing the lower end, but not breaking support levels quickly.
What could change it:
- Upside risk: A more hawkish Fed tone or stronger US data could lift the USD and push USD/MYR higher.
- Downside risk: Softer US data or a bigger-than-expected Fed rate cut path, plus continued oil strength, could push USD/MYR toward the lower end.
