MYR/EUR Outlook:
Bullish, with the Malaysian Ringgit trading above its recent average and benefiting from Malaysia's economic resilience.
Key drivers:
• Rate gap: The Malaysian central bank's cautious approach amid a weaker US dollar supports the MYR against the EUR, which is affected by rising geopolitical tensions.
• Risk/commodities: Recent increases in oil prices, still above average, tend to support the MYR by boosting Malaysia's export earnings.
• One macro factor: Malaysia's GDP growth of 5.2% showcases strong domestic consumption and export performance, providing strength to the MYR.
Range:
MYR/EUR is likely to hold within its recent range, with stability punctuated by potential upward movement.
What could change it:
• Upside risk: An improvement in Eurozone economic data could strengthen the EUR against the MYR.
• Downside risk: Heightened geopolitical tensions could further weaken the EUR and elevate the MYR's position.