The Pound Sterling to Malaysian Ringgit (GBP/MYR) exchange rate jumped in Monday’s European trading while the Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Thai Baht (GBP/THB) exchange rates softened as the US Dollar (USD) continued to strengthen and investors forecast the Bank of Thailand (BoT) would likely keep interest rates stable in June at 1.50%.
Bank of Thailand (BoT) Interest Rate Decision Forecast to Cause Major Thai Baht (THB) Exchange Rate Movement
The Bank of Thailand interest rate decision is forecast to cause major market movement on Wednesday. Recent softness in the Thai Baht (THB) should allow policymakers to keep rates on hold for time being. The central bank has previously stated that its actions in monetary policy decisions have been largely driven by demand for a weaker domestic currency.
The Bank of Thailand previously cut interest rates in both March and April and is likely to wait for those adjustments to have an impact before cutting again.
Malaysian Ringgit (MYR) Exchange Rate Sinks to Lows as US Dollar (USD) Rallies
Meanwhile, the Malaysian Ringgit (MYR) exchange rate dropped against majors such as the US Dollar (USD) and Pound (GBP), adding to total losses already made this year. The MYR/USD currency pair slipped to nine-year lows on Monday, dropping by over 1.0% after already registering a 7.0% loss so far in 2015.
A rallying US Dollar (USD) has been accredited for causing a large part of the Malaysian Ringgit’s (MYR) weakness after upbeat US Change in Non-Farm Payrolls data bolstered the US Dollar (USD) last week. The ecostat came in at 280,000 in May and saw the majority of emerging- market currencies drop amid a US Dollar (USD) rally.
The surge in employment supported speculation that the Federal Reserve may hike interest rates this year, after months of conflicting reports.
Economist Thomas Costerg commented: ‘A Fed rate hike later this year is still on. The GDP [Gross Domestic Product] data had been quite weak in Q1, and the Fed is looking for reasons to dismiss the report. Today’s payrolls report to some degree puts the Q1 weakness behind us.’
Meanwhile, the Malaysian Ringgit (MYR) exchange rate may experience some movement against the US Dollar (USD) and Pound Sterling (GBP) on Thursday with the release of the Malaysian Industrial Production ecostat. On the year, Malaysian Industrial Production is forecast to decline from 6.9% to 5.9%.
Pound Sterling (GBP) and US Dollar (USD) Exchange Rate Forecast
The Pound Sterling (GBP) exchange rate could be in for an influential day on Wednesday with the release of both UK Industrial Production and Manufacturing Production data. Additionally, the UK NIESR Gross Domestic Product Estimate will also emerge during Wednesday’s European trading.
The US Dollar (USD) is forecast for hefty exchange rate movement on Thursday when the US economy releases Advance Retail Sales stats. Friday will follow with US University of Michigan Consumer Confidence data.
The Pound Sterling to Malaysian Ringgit (GBP/MYR) exchange rate is trending at 5.7367, rising from session lows of 5.6643. The Pound Sterling to Thai Baht (GBP/THB) exchange rate is trending in the region of 51.5740 with market movement of -0.64%. The US Dollar to Malaysian Ringgit (USD/MYR) exchange rate is trending in the vicinity of 3.7660, after registering lows of 3.7170. The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending at 1.5246.