Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid highlighted that the ringgit had strengthened by 1.6% week-on-week against the US dollar.
The local currency surged to 4.1230/4.1280 from yesterday’s close of 4.1430/4.1485, marking a year-to-date gain of 11.36%.
Afzanizam noted that the local currency was well-supported, particularly during the morning session when the dollar-ringgit reached RM4.1175 in early trading.
He also said that the ringgit’s appreciation was broad-based, gaining against the euro, British pound, Japanese yen, and Singapore dollar by 1.9%, 1.2%, 1.7%, and 1.2%, respectively, on a week-on-week basis.
“The general expectation for interest rate cuts in the US remains intact ahead of the upcoming Federal Open Market Committee (FOMC) meetings in November and December,” he told Bernama.
Furthermore, Afzanizam stated that more investment banks have revised their ratings on Malaysia from “underweight” to “neutral”, reflecting a more positive outlook on the Malaysian economy and, consequently, the potential for a stronger ringgit moving forward.
BMI Country Risk & Industry Research (BMI), a unit of Fitch Solutions, has revised its end-2024 forecast for the ringgit to RM4 per US dollar from RM4.55 previously, reflecting the currency’s robust performance in the third quarter of 2024.
Over the medium-term, BMI continues to hold a positive view on the ringgit as narrowing yield differentials with the US, and a relatively resilient growth outlook bodes well for the local currency.
“Risks to our forecasts are skewed towards a weaker ringgit and hinge largely on the US Federal Reserve (Fed) interest rate trajectory and China’s growth,” it said in a commentary note.
The ringgit traded mostly higher against a basket of major currencies, except for the Japanese yen, weakening to 2.8804/2.8841 from 2.8634/2.8674.
It rose against the euro to 4.6009/4.6064 from 4.6157/4.6218 yesterday and appreciated against the British pound to 5.5178/5.5245 from 5.5317/5.5391.
The ringgit also traded firmer against Asean currencies.
It was higher against the Singapore dollar to 3.2146/3.2187 from 3.2204/3.2249 at yesterday’s close and gained against the Philippine peso to 7.35/7.37 from 7.40/7.41.
The ringgit improved against the Indonesian rupiah to 272.5/273.0 from 273.1/273.6 and strengthened to 12.7202/12.7407 from 12.7242/12.7489 against the Thai baht.