On Wednesday, the Fed’s Vice Chair, Richard Clarida, gave a statement that the Fed may change its monetary policy and raise interest rates by the end of 2022. This marks a change in the tone of the US Central Bank, which has maintained a Dovish stance to this day and is now beginning to signal a more Hawkish stance. This caused great volatility in the market and the USDMYR is now trading at 4.2200. Data from the ADP Non-Farm Employment change also brought numbers well below expectations for the creation of new jobs in the US. The official data (Non-Farm Payrolls) will be released on Friday, and this could determine the Fed’s next steps regarding its monetary policy. If the USDMYR breaks below to 4.2170, it could fall to the 4.1750 level in a few days.
This Wednesday the US Dollar made an initial downward move earlier in the day and then regained virtually everything it lost earlier in the session and is now trading at 1.3515. The ADP Non-Farm Employment Change data brought a number well below expectations (330k real against 695k forecast). But the most important macroeconomic element was a possible shift in the Fed’s stance on macroeconomic policy. The FED’s Vice Chair, Richard Clarida stated that the FED may have criteria to raise interest rates by the end of 2022. This is well ahead of the initially scheduled possible raise in the interest rate, in September 2023. This caused the US dollar to appreciate widely against almost all of its counterparts. Driven by these macroeconomic elements, the next move in the USDSGD could be a rally, which will take the price up to 1.3690.
