Ringgit Poised To See Profit-taking After This Week's Strong Rally

By Zufazlin Baharuddin

KUALA LUMPUR, Aug 22 (Bernama) -- 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.

Kenanga Investment Bank Bhd (Kenanga IB) said 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 on Aug 27-29.

Investors will be watching for clues on the Fed’s policy decision at the upcoming Federal Open Market Committee (FOMC) meeting on Sept 15-16.

“US dollar/ringgit should trade within 4.04-4.06, with an early corrective bounce likely before the ringgit’s strength resumes and 4.06 breaking only on Iran escalation,” it said in a note.

Kenanga IB said prior to the symposium, market players would be eyeing the US personal consumption expenditures (PCE) inflation report which will be released on Aug 26.

On a Friday-to-Friday basis, the ringgit rose against the greenback to 4.0365/0405 from 4.0840/0885 a week earlier.

The local currency traded mostly higher against a basket of major currencies during the week.

The ringgit appreciated versus the British pound to 5.5118/5173 from 5.5232/5293 on Friday last week and  strengthened against the Japanese yen to 2.5449/5476 from 2.5660/5690 a week earlier, but it slipped vis-a-vis the euro to 4.7227/7274 from 4.7182/7234 previously.

The ringgit traded mostly higher against ASEAN currencies.

The local note improved versus the Philippine peso to 6.54/6.55 from 6.64/6.66 a week earlier, gained ground against the Singapore dollar to 3.1809/1843 from 3.1924/1964 previously and increased vis-a-vis the Indonesian rupiah to 228.1/228.4 from 229.0/229.4.

However, it eased against the Thai baht to 12.3474/3638 from 12.3153/3333 a week before.

-- BERNAMA