MYR/USD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and near mid-range.
Key drivers:
• Rate gap: The Malaysian central bank's favorable rate stance against the U.S. Federal Reserve’s stable rates supports the MYR.
• Risk/commodities: Oil prices are elevated, which bodes well for the MYR as Malaysia is an oil exporter.
• One macro factor: Malaysia's strong GDP growth of 5.2% in the third quarter strengthens economic confidence and MYR stability.
Range:
Expect MYR/USD to hold within the recent 3-month range, as supportive factors balance out pressures.
What could change it:
• Upside risk: A stronger GDP growth forecast or unexpected foreign direct investment inflow could bolster the MYR.
• Downside risk: Renewed geopolitical tensions or a deteriorating U.S. economic outlook could weaken the USD and impact the MYR negatively.