The US Dollar continues its steady move towards an all-time high on the Ringgit at 4.5380 and is now trading at 4.5250. The bullish move comes after the release of Core Producer Price Index (PPI) data for the USD, which brought a higher-than-expected reading (7.3% real versus 7.1% forecast). The PPI measures the change in the price of goods, products and services used by companies to make their products. It is therefore a view of inflation at the beginning of the production chain since higher inflation in input prices will end up falling on the final consumer. The PPI has a lagging effect on the economy, since if the prices of inputs rise now, inflation will only appear for the consumer in a few months, when the products that are produced today reach the shelves of the final consumer. From a technical point of view, the all-time high on USDMYR was in November 2016, when the price reached 4.5380, where the price may encounter temporary resistance.
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© 2019 High Leverage FX - All Rights Reserved.