The ringgit is anticipated to appreciate against the US dollar in the coming week, driven by sustained demand for Malaysia's currency, The Star reported. Dr. Mohd Afzanizam Abdul Rashid, Chief Economist at Bank Muamalat Malaysia Bhd, forecasts that the ringgit may surpass its immediate support level of MYR4.3030 soon.

Key economic events to watch next week include Bank Negara Malaysia's Monetary Policy Committee Meeting and the US non-farm payrolls report. Dr. Rashid highlighted that since the removal of the currency peg on July 21, 2005, the average US dollar/ringgit rate has been MYR3.7875. This suggests a strong potential for the ringgit to appreciate as it aligns with its long-term average.

AmBank Group also projects further strength for the ringgit. The bank attributes this to solid economic fundamentals and the anticipated start of the US Federal Reserve’s interest rate cutting cycle. It expects Bank Negara Malaysia to maintain its overnight policy rate (OPR) through the remainder of 2024 and possibly into the first half of 2025, which would narrow the rate differential between the OPR and the Federal Funds Rate. This scenario is expected to boost risk appetite and favour emerging market assets, including ringgit-denominated assets.

Foreign investment trends support this outlook. Up to August 29, there was notable foreign buying in Malaysian equities, with net purchases reaching MYR2.53bn year-to-date. This, coupled with Malaysia’s strong credit rating, is seen as a positive factor for the ringgit.

For the week ending Friday, the ringgit strengthened to 4.3185/3225 against the US dollar from 4.3720/3775 the previous week. It also gained against other major currencies: the euro (4.7862/7906 from 4.8604/8665), the British pound (5.6939/6992 from 5.7391/7463), and the Japanese yen (2.9754/9784 from 2.9914/9956).

In ASEAN currency pairs, the ringgit improved against the Singapore dollar (3.3158/3191 from 3.3410/3454), the Indonesian rupiah (279.3/279.8 from 282.1/282.7), the Thai baht (12.7540/7726 from 12.7575/7810), and the Philippine peso (7.69/7.70 from 7.75/7.76) over the same period.