The gap in the Labour Day public holiday saw the Trump administration delaying the implementation of the proposed aluminium and steel tariffs on Canada, the EU, and Mexico until June 1. As we have stated previously, the imposition of tariffs would negatively impact the US economy and the USD. Hence, we believe the news of the delay, which could turn out to be permanent, is being viewed positively for the USD.

We expect the DXY to continue its uptrend ahead of today’s FOMC outcome and will be heavily dependent on any indication that the Fed will raise rates at least three more times in 2018, marking in four hikes for the year. Thus, we believe the USD/MYR will likely trade between our support levels of 3.9067 and 3.9118 while our resistance is pegged at 3.9286 and 3.9326.

• Recent big news from the gap in the Labour Day public holiday is the Trump administration’s delay in implementation of the proposed aluminium and steel tariffs on Canada, the EU, and Mexico until June 1.

• As we have stated previously, the imposition of tariffs would negatively impact the US economy and the USD. Hence, we believe the news of the delay, which could turn out to be permanent, is being viewed positively for the USD.

• Another important piece of news that will influence the USD prior to the US job data is the outcome of the FOMC meeting today. While we expect no change in the policy rate given recent gains in inflation and the prospect for strong economic growth through mid-2018, we widely expect the FOMC's policy statement to be hawkish for the next rate hike in June by 25bps.

• So, we expect the DXY to continue its uptrend ahead of today’s FOMC outcome and will be heavily dependent on any indication that the Fed will raise rates at least three more times in 2018, marking in four hikes for the year.

• Thus, we believe the USD/MYR will likely trade between our support levels of 3.9067 and 3.9118 while our resistance is pegged at 3.9286 and 3.9326.

Source: AmInvest Research - 2 May 2018