Is the Ringgit's Rise About to Take a Breather?
The Malaysian ringgit recently hit a near six-year high against the US dollar, but experts predict a period of profit-taking is on the horizon. This means the ringgit's upward momentum might slow down or even slightly reverse in the coming days. The expected trading range is between RM4.07 and RM4.09 against the US dollar.
This week, the ringgit mostly trended upwards. It started at around 4.09 and closed at 4.07 on Friday. Yesterday, it further strengthened to 4.0740/0785 compared to 4.0840/0880 the previous day. This level was last seen on January 15, 2020, when the ringgit closed at 4.0740 against the US dollar.
Dr. Mohd Afzanizam Abdul Rashid, the chief economist at Bank Muamalat Malaysia Bhd, points out that technical indicators suggest the ringgit is now in an overbought territory. This often signals that investors might start selling to secure their profits.
But here's where it gets interesting: The focus next week will be on the US Gross Domestic Product (GDP) for the third quarter of 2025, which is expected to be released on December 23rd. This economic data could significantly influence the ringgit's performance.
Earlier this week, the ringgit's movements were largely influenced by key US economic data. This included the non-farm payrolls and the Consumer Price Index (CPI), which are crucial for understanding the US monetary policy outlook.
The US non-farm payrolls increased by 64,000 in November, after a contraction in October. The unemployment rate rose to 4.6%, influenced by a larger labor force, moderating wage growth, and slower retail sales. Meanwhile, US inflation in November came in below expectations at 2.7%, compared to the estimated 3.1%. Core inflation also decreased to 2.6% from 3.0% in September.
On a weekly basis, the ringgit strengthened against the US dollar, closing at 4.0740/0785 compared to 4.0945/1005 at the end of the previous week. It also performed well against other major currencies.
- It strengthened against the Japanese yen to 2.5909/5940 from 2.6264/6304 a week earlier.
- It climbed against the British pound to 5.4514/4574 from 5.4789/4869.
- It appreciated against the euro to 4.7715/7767 from 4.8037/8107.
And this is the part most people miss: The ringgit's performance against its ASEAN peers was mostly positive.
- It gained against the Indonesian rupiah to 243.2/243.6 from 245.9/246.4 the previous Friday.
- It increased against the Singapore dollar to 3.1515/1553 from 3.1701/1750.
- It improved against the Thai baht to 12.9428/9620 from 12.9589/9845.
However, the ringgit slightly decreased against the Philippine peso to 6.94/6.95 from 6.93/6.94.
Controversy & Comment Hooks: What do you think will happen to the ringgit in the coming weeks? Do you agree with the prediction of profit-taking, or do you foresee a continued rise? Share your thoughts in the comments below!
