USD/MYR Outlook:
Bearish, as the rate is below its recent average and near recent lows due to weak US economic data.
Key drivers:
- Rate gap: The Federal Reserve's decision to hold interest rates steady reflects concerns about economic performance, which contrasts with the stable outlook of Bank Negara Malaysia (Malaysian central bank).
- Risk/commodities: Higher oil prices support the MYR, benefiting Malaysia as a net oil exporter, which adds pressure on the weaker USD.
- One macro factor: Malaysia's GDP growth of 5.2% in the last quarter demonstrates strong domestic consumption and exports, supporting the ringgit.
Range:
The USD/MYR is likely to hold steady in its recent 3-month range, oscillating between established lows and highs.
What could change it:
- Upside risk: A surprising recovery in US jobs data could bolster the USD.
- Downside risk: Continued geopolitical tensions could further weaken the USD, pressuring the exchange rate downward.
