The MYR to GBP exchange rate currently shows a range-bound bias. The recent hawkish signals from the Bank of England (BoE), indicating slower pace of interest rate cuts, are supporting the pound. Conversely, positive Malaysian economic fundamentals, particularly robust GDP growth, are bolstering the MYR.
Interest rate differentials are narrowing, as the Fed plans cautious rate cuts, while Malaysia's favorable economic indicators enhance MYR's strength. Additionally, the MYR could benefit from trends of global de-dollarization which position Malaysia as an attractive investment destination.
In the near-term, the trading range is likely to remain stable as both currencies are affected by broader economic factors. Upside risks include stronger retail sales data supporting GBP, while downside risks could arise from fiscal concerns in the UK and oil price fluctuations, with oil trading near 7-day lows. The MYR is currently 1.0% above its 3-month average, reflecting some strength despite a volatile oil market that has recently dipped below its average price.
