The Dollar fell against Ringgit on Tuesday and is now trading at 4.2180. After a long bullish move, it is normal for traders to start taking profits ahead of the release of the ADP Nonfarm Employment Change data for the month of July, scheduled for later this Wednesday. This macroeconomic indicator is seen as a preview of the Non-Farm Payroll and tends to cause high volatility for the dollar as investors and fund managers try to anticipate the official NFP news (due on Friday) and adjust their portfolios accordingly. Keeping the unemployment rate low is one of the main objectives of the Fed at this time, so more job creation than expected can be understood that the Fed’s financial stimulus is working, and this could cause the dollar to rise. From a technical point of view, the USDMYR could drop as far as the 4.1750 level.
The Dollar has already gained 6.45% against the Thai Baht in a movement that began in early June. For the past few days the USDTHB has been in a sideways lateralization, and this can be understood as indecision sentiment and the market seems to be holding its breath until the US employment data comes out. One such data is the ADP Non-Farm Employment Change, to be released later this Wednesday. Official data, however, comes out on Friday, which should bring the numbers about the creation of new jobs and the unemployment rate in the US. If these numbers come in lower than expected, investors may interpret that this will bring more financial stimulus from the Fed and therefore the dollar may initially fall against its counterparts. From a technical point of view, if the USDTHB breaks below the 32.90 level, it could drop to 31.60 in a few days.
