US Dollar to Malaysian Ringgit (USD/MYR) Exchange Rate Forecast to Edge Higher ahead of US Advance Retail Sales

Wednesday saw the US Dollar dive versus its major rivals after the recent bullish run opened up some attractive selling positions. The spate of trader profit-locking saw the US Dollar depreciate even after domestic data produced better-than-expected results. May’s Monthly Budget Statement came in at -$82.4 billion, a steeper rise than the median market forecast jump from -$130.0 billion to -$97.5 billion. In addition, MBA Mortgage Applications advanced by 8.4% in the week ending June 5th; significantly eclipsing the previous figure of -7.6%. ‘Mortgage application volume rebounded strongly in the week following the Memorial Day holiday, indicating that the holiday had a larger impact on business activity than originally assumed,’ Mike Fratantoni, MBA's chief economist, said. ‘Strong job gains in May and initial signs of wage growth are supporting the purchase market.’

Thursday has seen the US asset advance as traders digest the positive data results following the period of profit buying. The appreciation is likely to continue amid speculation that Advance Retail Sales, which came in at 0.0% previously, will significantly improve. US labour market data will also be of significance for those invested in the US asset.

The US Dollar to Malaysian Ringgit (USD/MYR) is currently trending in the region of 3.7452.

The Malaysian Ringgit, meanwhile, softened versus many of its currency rivals after industrial output slowed. On the year, Industrial Production grew just 4.0% in April which is the slowest pace since the previous July. Analysts had predicted that Malaysia’s industrial output would grow by 4.5%. Economists at Barclays noted that ‘growth slowed especially in mining, with natural gas output down sharply in April.’ But manufacturing looks resilient, they said, particularly among electronics and food production. ‘After a strong performance in Q1, momentum in growth is expected to moderate in Q2. However, overall growth rates are likely to remain healthy, and we see modest upside risks to our 4.5% growth projection in 2015.’

Aiding the Malaysian Ringgit downtrend is US Dollar strength which sees softened demand for high-yielding and riskier currencies. Geopolitical tension in Europe is also weighing on demand for said assets.

Looking ahead, Friday will see an absence of Malaysian economic data. The US Dollar to Malaysian Ringgit (USD/MYR) exchange rate, therefore, will see volatility as the result of US Dollar movement. Friday will be significant for those invested in the ‘Greenback’ (USD) with the preliminary figure for June’s University of Michigan Confidence, which is expected to rise from 90.7 to 91.4.

The US Dollar to Malaysian Ringgit (USD/MYR) exchange rate was trending within the range of 3.7183 to 3.7463 in the early stages of Thursday’s European session