Ringgit Profit-Taking Looms as Rally Continues

The Malaysian ringgit is expected to see profit-taking next week after its strong rally over the last six trading days.

According to Kenanga Investment Bank Bhd (Kenanga IB), the local note ended at 4.0365/0405 to the US dollar on Friday, and investors are watching for clues on the US Federal Reserve's policy decision at the upcoming Federal Open Market Committee meeting on September 15-16.

The ringgit has been rising against major currencies, appreciating to 5.5118/5173 versus the British pound from 5.5232/5293 a week earlier and strengthening to 2.5449/5476 against the Japanese yen from 2.5660/5690.

Kenanga IB notes that the 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.