This week the US Dollar has gained about 0,5% against the Ringgit amid multiple news coming from the US. On Tuesday he had the Existing Home Sales, which brought a higher-than-expected number and that made the US Dollar jump against the Ringgit. On Wednesday the FED’s chairman, Jay Powell testified before the Joint Economic Committee. Among other things, the market understood that the current stimulus situation is unlikely to remain unchanged and the FED will have to increase interest rate before 2023. That understanding also made the US Dollar rise against the Ringgit, and it ended up being traded at 4.1591. On Thursday, the GPD number came as expected, but the Initial Jobless Claims brought a higher-than-expected number. The combination of those two macro events made the US fall back a little and closed at the same price it opened.
In the US, the next week’s most important events on the calendar are the Consumer Confidence, due on Tuesday, the ISM PMI, due on Thursday and the Non-Farm Payroll, due on Friday. On the Malaysian economic event, investors will pay attention to the Trade Balance, due on Monday and the Money Supply, due on Wednesday.
In short, although the FED keeps saying that the inflation is just temporary, the market is already pricing an increase in the interest rate before September 2023. As the macroeconomic numbers come out, this theory may be confirmed or denied. If the numbers come as expected, it will mean no big surprise and therefore, the US Dollar is likely to keep gaining value against the Ringgit. From a technical point of view, the 4.1750 and the 4.2200 are good projections to the next possible up move.
USD/CNH
Since the beginning of the pandemic, the US Dollar has been falling against the Chinese Yuan. In recent days it has made a little move to the upside, but now seems ready to resume the downtrend again. US inflation is already a reality, but the FED has not shown any sign of changing interest rates so far and that opens the possibility for the continuation in the devaluation of the dollar against the Yuan. From a technical point of view, there is a good chance that the USDCNH will keep its move down to reach the 6.3800 level in a couple of weeks.
