The Malaysian Ringgit's recent surge has traders on the edge of their seats, but will it continue its ascent? Brace for a potential profit-taking rollercoaster!
After reaching a remarkable near six-year high against the US dollar, the Ringgit is predicted to face profit-taking next week, fluctuating between RM4.07 and RM4.09. This comes on the heels of a strong performance this week, opening at 4.09 and climbing to 4.07 by Friday's close.
Here's the intriguing part: On Thursday, the Ringgit stood tall at 4.0840/0880 against the greenback, but by 6 pm yesterday, it had risen to 4.0740/0785, a level not seen since January 15, 2020. And this is where it gets controversial—Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, suggests the currency has ventured into overbought territory, signaling potential profit-taking.
But wait, there's more! The upcoming US gross domestic product (GDP) data for Q3 2025, due on December 23, will be a key focus. This report could significantly impact the Ringgit's trajectory, as it did earlier this week when US nonfarm payrolls and the Consumer Price Index (CPI) influenced the currency's direction.
US employment data revealed a 64,000 rise in nonfarm payrolls for November, rebounding from October's contraction, while the unemployment rate ticked up to 4.6%. Interestingly, US inflation for November missed expectations, coming in at 2.7% compared to the estimated 3.1%.
Over the week, the Ringgit showcased its strength, closing higher against the US dollar at 4.0740/0785, up from 4.0945/1005 last week. It also performed well against other major currencies, including the Japanese yen, British pound, and euro.
Among its ASEAN peers, the Ringgit dominated, gaining ground against the Indonesian rupiah, Singapore dollar, and Thai baht. However, it took a slight dip against the Philippine peso.
So, will the Ringgit's rally continue, or is a profit-taking pullback imminent? Share your thoughts in the comments below! Is the currency's strength sustainable, or are we in for a surprise?
