The Ringgit fell against the Dollar on Wednesday and is now trading at 4.1830. The market has been moving hesitantly over the past few days, waiting for the Fed’s decision on the USD interest rate and the FOMC report. The expectation is that the Fed will start withdrawing financial stimulus at its November meeting. The tapering process can cause the Dollar to rise and stocks around the world to fall. The FOMC press conference can give hints on the Fed’s next steps. From the perspective of MYR, the Consumer Price Index, due on Friday can give tips on the economic health in Malaysia. From a technical point of view, the USDMYR may drop as low as 4.1680 before resuming its bullish movement.
The Dollar has shown some buying strength against the Chinese Yuan this Wednesday and is now trading at 6.4655. Growing fears that the Chinese company Evergrande could default on several banks has heightened risk aversion around the world and caused stocks to fall and the dollar to rise over the course of this week. Still, movement has been small as the market is awaiting the FOMC data on US monetary policy and interest rates. This information will be released later and has the potential to move the market globally. If during the press conference the Fed hints that it may start to cut the financial stimulus (now 120 billion dollars per month), the USD could rise significantly against its counterparts and against the Chinese Yuan. From a technical point of view, if the USDCNY breaks above the 6.4700 level, it could rise to 6.5700 in a few days.
