USD/MYR Unaffected by Malaysia’s Better Than Forecast GDP Data
Some respite for Malaysia as its economy posted a weaker than anticipated contraction during Q1 2021 on the back of better domestic as well as overseas demand. Malaysia’s GDP came in at -0.5% during the first three months of this year, against Q4 2020’s reading of -3.4% and economists’ forecast of -1.9%.
The pace of contraction eased lower as Malaysia saw a surge in exports as its key trade partners start recovering from the crisis, driving up trade activity. During the month of March, exports out of Malaysia increased by 31% YoY – the fastest rate seen in almost four years.
After contracting by 5.6% through 2020 on account of the coronavirus pandemic, the Malaysian central bank governor expressed hope that the economy could grow by 6-7% this year, holding the forecast steady. However, the economic rebound still faces risks if fresh coronavirus cases continue to climb higher, especially with Malaysia going back into a nationwide lockdown since Monday.
Ahead of the release of the GDP data, the Malaysian ringgit had exhibited signs of weakness against the US dollar and continues to trade under pressure, unaffected by the somewhat positive release. At the time of writing, [[USD/MYR]] is trading at around 4.114, keeping the MYR more bearish than during Monday’s close when the pair’s value stood at 4.1050.
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