USDMYR Technical Analysis

The US Dollar dropped slightly against the Ringgit on Thursday and is now trading at 4.3980. The downward movement can be explained by the release of data from the US ISM Manufacturing PMI for the month of December, which came in below expectations (48.4 real against 48.5 forecast), which tends to be negative for the USD. The PMI measures the confidence level of purchasing managers of large US companies and can be interpreted as an indicator of US economic health from a business perspective. Readings above 50 tend to show an expanding economy as most companies are optimistic about the country’s economic future. Readings below 50 tend to show at least an economic slowdown or even economic contraction. From a technical point of view, considering that the USDMYR has risen a lot in recent months, it is possible that a stronger downward pullback will happen over the next few days. USDMYR may drop as low as 4.2400 during the first quarter of 2023.