The US Dollar was up +0.17% against the Ringgit on Wednesday and is now trading at 4.6540. The recent upward movement is due to the release of Building Permits data, which came in higher than expected (1,443M real against 1,442M forecast). This indicator measures the number of construction permits issued by the government authorizing the construction of new homes and is an important indicator of future demand in the economy, as builders will need to purchase construction materials and hire skilled labour. Therefore, when the reading of the Building Permits comes in above expectations, the market’s interpretation is that this demand could pressure the price of goods, products, and services over the next few months and therefore the USD appreciates against the MYR. The New Homes Sales indicator was also higher than expected (714k real against 705k forecast) confirming the possible increase in demand over the coming months. If this scenario happens, that could add pressure to the Federal Reserve (FED) to increase interest rates in the coming meetings. From a technical point of view the USDMYR is moving towards the region at 4.6850, where it is likely to encounter important resistance on the daily chart. If the price manages to break above 4.6850, it could move up to 4.7450 in a few days.
