EUR/MYR Outlook:
Bearish, reflecting the rate being below its recent average and near recent lows, with limited strong drivers.
Key drivers:
• Rate gap: The European Central Bank is maintaining interest rates, while the US Federal Reserve's recent cuts support a weaker US dollar, benefiting the MYR.
• Risk/commodities: Oil prices are currently elevated, which can put upward pressure on the MYR and dampen demand for the euro as inflation concerns bubble.
• One macro factor: Malaysia's continued GDP growth of 5.2% in the last quarter suggests robust economic health, further supporting MYR strength.
Range:
The EUR/MYR pair is likely to drift at current levels, considering it is trading within a stable range and close to recent lows.
What could change it:
• Upside risk: A shift in ECB policy towards higher interest rates could bolster the euro's value.
• Downside risk: A significant decline in oil prices could reduce support for the MYR, leading to further euro strength.