The US Dollar has gained a lot of ground against the Ringgit this Tuesday amid the FED chairman’s speech, Jay Powell, to the Joint Economic Committee, earlier today. The growing concerns about inflation in the US are now a reality and although the FED did not make any clear move, today’s speech made clear that the interest rate for the US Dollar is likely to increase before September 2023. The market priced that information and pushed the Dollar to break an important level of resistance against the Ringgit, the 4.1500. Now the price has no nearby resistance, and it could fluctuate until it reaches 4.1700 in the next few days.
The Singapore Dollar has been falling against the Ringgit since the end of May and it is now traded at 3.0911. On this Wednesday, investors will pay close attention to the Singapore Consumer Price Index, due later. Should this number come higher than expected, it will mean that inflation is at the gate and the interest rate is likely to increase in the short term, causing the SGD to gain more value against the MYR. As the recent CPI readings are hitting the highest level since 2014, that could force a major step towards controlling inflation. From a technical point of view, if the price breaks below 3.0771, it could lead to a great fall to 3.0300 in a couple of months. On the other hand, a break above 3.1050, will probably bring the SGDMYR to 3.1320.
