After several consecutive days of declines, the Dollar gained some ground against Ringgit this Tuesday and is now trading at 4.1490. Earlier this morning, Goldman Sachs issued a statement saying that it sees a 70% chance that the Fed will announce the tapering process at the FOMC meeting in November. Goldman Sachs forecasts that once the tapering process starts (tapering – withdrawal of financial incentives, currently at 120 billion dollars a month), it will be done gradually and that the Fed will withdraw approximately 15 billion dollars a month, in a process which may last until July 2022. Investors have already anticipated the possible tapering process, and this has caused the dollar to appreciate against the Ringgit. From a technical point of view, the USDMYR could rise as high as 4.2200 in a few days.
The US Dollar has been sideways against the Singapore Dollar and is now trading at 1.3420. Following Philadelphia Fed President Harker’s comments about withdrawing financial stimuli, the US Dollar begins to brace itself for a possible bullish move in the coming days. Among other things, he said he prefers the tapering process to start sooner than later and that the process could take eight to twelve months to complete. He also said he has some concerns about rising inflation in the US, that an earlier-than-expected interest rate hike is not entirely out of the question, but any decision should be based on the economy at the time of the decision. The tapering process is being awaited by the market, which is beginning to worry about inflation in the US. When tapering starts, the US Dollar may enter a broad uptrend. From a technical point of view, if the USDSGD breaks above the 1.3450 level, it could rise to 1.3650 in a few days.
