The US Dollar dropped as much as 0.45% against the Ringgit and then recovered a little to trade at 4.4820, down just 0.22% for the day. The downward movement can be explained by the release of data from the US Consumer Price Index (CPI) which measures the change in the price of goods and services from the perspective of the consumer and is therefore the macroeconomic indicator that measures inflation in the US. Today’s reading came in exactly as expected at 6.0% and as the previous reading was 6.4%, the market understood that US inflation is being controlled. Thus, it is understood that the Federal Reserve (FED) may adopt a milder stance regarding the next interest rate decision for the USD next Wednesday, March 22nd. And this expectation of a decrease in the pace of interest rate hikes for the USD is what causes its depreciation against the Ringgit today. From a technical point of view, USDMYR may drop as low as 4.3650 in the coming days. Investors should pay attention to speeches by FED officials, as this could change the scenario at any time.
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© 2019 High Leverage FX - All Rights Reserved.