USDMYR Technical Analysis

The US Dollar is down -0.27% against the Ringgit from yesterday’s close and is now trading at 4.3980. The downward move happened due to the release of data from the US Consumer Price Index (CPI) yesterday, which came in below expectations (5% real against 5.2% forecast). As the CPI measures inflation in the US, a lower-than-expected reading shows that the Federal Reserve’s (FED) inflation control measures are having a positive effect to cool down the economy. That’s why investors understood that the FED could adopt more lenient monetary policies in the coming meetings. Data from the Producer Price Index (PPI) confirm this decrease in US inflation as the reading came in lower than expected (2.7% real against 3% forecast). The previous reading had been 4.9% and what calls attention is the big difference between the 2 readings (previous: 4,9%, now: 2,7%). The PPI measures inflation at the beginning of the production chain, as it monitors the price of goods, products and services used by companies to produce their products. From a technical point of view, the USDMYR may continue falling towards the 1.3650 region where it should find temporary support.