The Dollar has been sideways against Ringgit for the past few days and is now trading at 4.2310. Today’s most important news for the Dollar was the Interest Rate and the FOMC report on the monetary policy taken by the Fed to maintain the US economic recovery. The interest rate remained unchanged at 0.25%. The FOMC report brought the information that the Fed will not change the current financial stimulus (by 120 billion dollars a month) until the level of employment in the US is at the same level as before the beginning of the pandemic. Regarding inflation, the Fed recognizes that there is temporary inflation, but as inflation spent a long time below 2%, now the Fed will accept inflation above 2% so that the inflation average stays around 2%. This means that the FED will continue to print money to support the US and the dollar could resume its downward movement against its counterparts. From a technical point of view, if the USDMYR breaks below the 4.2200 level, it could reach 4.1750 in a few days.
The US dollar fell against the Singapore dollar this Tuesday and is now trading at 1.3560. Yesterday’s FOMC report showed that the Fed has no intention of raising interest rates in the short term. At the same time, the FOMC announced that it will maintain the monetary stimulus of $120 billion a month and it will accept inflation slightly above 2% until the labour market fully recovers and reaches levels before the beginning of the pandemic. The unemployment rate was around 3,5% before the pandemic and it is now at around 6%. It means that the FED is likely to keep interest rates low and financial stimulus high for the near future. From a technical standpoint, the USDSGD may fall as low as 1.3480 where it may encounter some temporary buying pressure.
