On a day of low volatility, the US Dollar rallies against the Ringgit and is now trading at 4.5480. The bullish move comes in anticipation of the USD interest rate decision, which is expected to be released on Wednesday. Market opinion is divided between 0.75% and 1%, which could drive the USD interest rate to 3.25% or 3.5%. While a 100 bps (1%) high is unlikely, this is a scenario that cannot be completely ruled out. The market is already pricing in a high of 75 bps and if it does happen, the USD is likely to fall in the first moment. On the other hand, if the 100-bps forecast comes true, it could give even more strength to the USD. It is possible that the market will be a little sideways until the interest rate decision for the USD. From a technical point of view, USDMYR is in an extreme overbought region (82.2), which could signal buyers’ fatigue in the near future. A breakout below 4.5280 could make room for further declines over the next few days.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.