The Dollar remained sideways against Ringgit this Friday and is now trading at 4.1570. The Initial Jobless Claims data brought numbers slightly higher than expected (332k real against 330k forecast). The data that surprised the market was the Core Retail Sales, which came in well above expectations (1.8% real against -0.1% forecast). This has great potential to cause the US Dollar to appreciate over the next few days, as consumer spending being high could signal the Fed that it will have to cut financial stimulus (currently at USD 120 billion per month) sooner than expected. From a technical point of view, if the USDMYR breaks above the 4.1600 level, it could rise to 4.2300 in a few days.
The Dollar showed an important entry of buying strength against the Chinese Yuan this Friday and is now trading at 6.4524. The Core Retail Sales data (which measures the change in the total value of sales at the retail level in the U.S., excluding automobiles) came in well above expectations (+1.8% against -0.1% forecast). That made the Dollar gain ground against most of its counterparts, especially the CNH. The Retail Sales also came in above expectations (+0.7% against -0.8% forecast). Both readings show that the Fed may have started the tapering process later this year and this has the potential to further increase the value of the dollar. From a technical standpoint, the USDCNH managed to break above yesterday’s high, which could characterize an ignition movement. If the price manages to break above 6.4600, it could rise to 6.5250 in a few days.
