Kuala lumpur: The ringgit is expected to experience profit-taking next week following its strong rally over the last six trading days. The local note ended at 4.0365/0405 to the US dollar on Friday.
According to BERNAMA News Agency, Kenanga Investment Bank Bhd (Kenanga IB) stated that the ringgit's sharp rally and oversold conditions this week leave room for profit-taking if US Federal Reserve (Fed) chair Kevin Warsh delivers less dovish guidance at the Jackson Hole Symposium taking place from August 27-29. Investors are keenly observing potential signals on the Fed's policy decisions at the forthcoming Federal Open Market Committee (FOMC) meeting scheduled for September 15-16.
Kenanga IB noted that the US dollar/ringgit is anticipated to trade within the 4.04-4.06 range, with an initial corrective bounce expected before the resumption of the ringgit's strength. A breach of the 4.06 mark is only foreseen in the event of an escalation involving Iran. The bank also highlighted that, prior to the symposium, market participants will be closely monitoring the US personal consumption expenditures (PCE) inflation report, which is set for release on August 26.
On a week-to-week basis, the ringgit appreciated against the US dollar, trading at 4.0365/0405 compared to 4.0840/0885 the previous week. The local currency showed strength against a basket of major currencies during the week. Specifically, the ringgit climbed against the British pound to 5.5118/5173 from 5.5232/5293 and gained against the Japanese yen, trading at 2.5449/5476 compared to 2.5660/5690 a week earlier. However, it saw a slight decrease against the euro, trading at 4.7227/7274 compared to 4.7182/7234 previously.
Additionally, the ringgit exhibited mostly positive performance against ASEAN currencies. It improved against the Philippine peso to 6.54/6.55 from 6.64/6.66, gained against the Singapore dollar to 3.1809/1843 from 3.1924/1964, and increased against the Indonesian rupiah to 228.1/228.4 from 229.0/229.4. Conversely, it slightly eased against the Thai baht, trading at 12.3474/3638 from 12.3153/3333 a week before.