USDMYR Technical Analysis

The US Dollar rises against the Ringgit and is now trading at 4.7350. The bullish move comes in anticipation of the USD interest rate decision for tomorrow. The Federal Reserve (FED) is expected to raise interest rates by 0.75% and if that happens, it will be the fourth consecutive increase of 0.75%. If the interest rate decision comes in line with expectations, it is possible that the USDMYR will fall at first, as the market has already priced in a good part of this increase. But investors will pay much more attention to the Fed’s statements at the press conference shortly thereafter, which should set the tone for the economic policy stance for the next steps. Some experts are already considering a slowdown in the path of interest rate hikes as early as December, which could make the Fed raise interest rates by just 0.5% at the next meeting. If tomorrow the Fed adopts a more dovish stance (a stance of facilitating access to credit to boost the economy), this could cause the USDMYR to fall over the next few days. Investors should also pay attention to the Malaysian interest rate decision to be released on Thursday. Bank Negara Malaysia (BNM) is expected to raise its interest rate from 2.5% to 2.75%, a much smaller increase than in the US Dollar.