The US Dollar continues to rise against the Ringgit at a slower rate on Tuesday and is now trading at 4.6460. The upward movement remains due to expectations that the Federal Reserve (FED) will continue to raise interest rates in the near futures. From now until the end of the year, there are still 2 meetings of the Federal Open Market Committee (who decides whether or not to increase the interest rates) and the expectation is that 2022 will end with the interest rate between 4.25% and 4.75% (currently it is at 3.25%). With this, the tendency is for the USD to continue to appreciate against other currencies. However, today’s reading of the ISM Manufacturing PMI for the month of September for the USD brought a reading well below expectations (50.9 real against 52.2 forecast), which adds elements of uncertainty regarding the health of the US economy. The Purchase Managers Index (PMI) measures the level of confidence of purchasing managers in the economic scenario for the near future. A reading above 50 means most purchasing managers are optimistic and this tends to mean economic expansion. A reading below 50 usually means economic contraction. In the case of today’s reading, it was still above 50, but well below expectations. From a technical point of view, USDMYR is in a key resistance region on the Monthly chart, testing the 1998 high and a pullback should begin soon.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.