=MARKET BUZZ: USD/MYR At 5-Month High Before Fed Outcome; More Upside Expected
KUALA LUMPUR (Jun 13) -- USD/MYR rises to highest since Jan 11 before Fed’s near-certain quarter percentage point interest rate increase. Pair now at 3.9940 against 3.9880 previous close. Fed later today widely expected to raise rates for second time this year. Focus on whether it signals steeper path of rate increases for this year and next. Fed’s last dot plots, a closely watched chart of where policymakers see rates headed, signaled three rate hikes this year and three more next year. Goldman Sachs says in note that their baseline case was for four rate hikes this year and it expected median plot to rise by quarter percentage point for next year. Stephen Innes, head of Asia-Pacific trading at Oanda, says more hawkish Fed could take the pair through psychological level of 4.00. Sentiment for MYR further soured by Moody’s report that Malaysia’s scrapping of GST could lead to revenue loss of 1.1% of this year’s GDP, further straining finances. Innes said Moody’s report “should put more stress” on MYR, more so as traders are eyeing push beyond the 4.00 handle.
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