The Dollar continues to gain ground against Ringgit this Tuesday amid growing concern over the Covid-19 Delta variant that has already caused some lockdown in several Southeast Asian regions. Since the dollar is seen as a safe haven in times of uncertainty, it is natural for investors to prefer holding dollars rather than buying stocks. The most important news of the day for the Dollar was the Building Permits, which came below expectations. For the Ringgit, the most important news of the week will come on Friday, when the Consumer Price Index data may shed light on the inflation situation in the country. Inflation in Malaysia jumped in March but now accumulates 2 readings below expectations. Lower inflation means the central bank will not be in such a hurry to raise interest rates and this could accelerate the dollar’s upward trend against Ringgit. From a technical point of view, the next point of interest is at 4.2400, where the USDMYR may encounter strong selling pressure.
The Ringgit continues losing value against the Chinese Yuan this Wednesday and is now traded at 1.5288. The bearish movement in the MYRCNH has been in place for over 1 year now and some signs of seller exhaustion may start to emerge over the next few days. There is an important area of support between 1.5100 and 1.5250, where the Ringgit may find some buying strength. The Consumer Price Index data for Malaysia, which will be released on Friday, could bring important information about inflation and therefore possible projections of an increase or cut in the interest rate in the country. As the last 2 readings came below expectations, it is possible that this scenario will repeat itself. If that is the case, the MYRCNH could reach the 1.5100 level in the coming days.
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© 2019 High Leverage FX - All Rights Reserved.