The US Dollar rose against Ringgit on Wednesday and is now trading at 4.1600. The announcement of the Consumer Price Index data, released earlier, brought the information of lower-than-expected inflation in the US (0.1% actual against 0.3% forecast). This may cause the Fed to take a little longer to start the tapering process, which could be positive for the Dollar. On Monday, Goldman Sachs issued a study saying it predicts a 70% chance that the US will start the tapering process in November of this year. From a technical point of view, the last two days of the USDMYR upward movement can be interpreted as the beginning of an ignition movement, which could bring the USDMYR to the 4,2400 level in a few days. Still, investors will be paying attention to any details about monetary policy coming from the Fed, as this could completely change the current scenario.
The Dollar gained some ground against the Chinese Yuan on Wednesday and is now trading at 6.4384. Although the Consumer Price Index data came in lower than expected for the Dollar, investors appear to be waiting for the Industrial Production data for China to be released later. Industrial Production is on the radar because recently the market has been concerned about Chinese production capacity, which has been showing lower numbers than expected. If the reading comes in higher than expected (5.8% forecast) this could strengthen the CNY. From a technical point of view, the USDCNY is now forming a double bottom and if it manages to break above 6.4500, it could rise to 6.5250 in a few days.
