Kuala lumpur: The ringgit is expected to maintain its momentum and trade within a range of 3.93 to 3.96 against the US dollar next week, as investors shift their focus to key United States economic data for direction.
According to BERNAMA News Agency, earlier this week, the ringgit strengthened to breach the 4.00 psychological level against the US dollar, as the currency extended its uptrend that began the week before, reflecting improving sentiment towards Malaysia's economic fundamentals and policy stability.
On Tuesday, Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour stated that policy certainty, ongoing government reforms, and supportive external factors have contributed to the ringgit's steady appreciation to levels last seen in 2018. He emphasized that while both external and domestic factors play vital roles, domestic factors remain the key focus for strengthening economic fundamentals, enhancing competitiveness, and sustaining reform measures supportive of long-term growth.
The ringgit rebounded to 3.9175 against the US dollar on Wednesday, marking its strongest closing level since April 2018. On a year-on-year basis, the local currency has appreciated 10.77 percent against the greenback. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid noted that market participants will be closely monitoring upcoming US economic data, particularly the Nonfarm Payroll (NFP) report, the unemployment rate, and the Institute for Supply Management (ISM) indices for the manufacturing and services sectors.
Dr. Mohd Afzanizam highlighted that the US Federal Reserve (Fed), in its latest Federal Open Market Committee (FOMC) statement, maintained its view that US economic activity has been expanding at a solid pace, prompting traders and investors to assess whether incoming data will continue to support that assessment. Despite recent movements, the ringgit has appreciated substantially this week, gaining about 1.6 percent from last week's level of 4.0068 to the dollar on January 23, 2026.
In a note, Kenanga Investment Bank Bhd stated that attention next week will turn to the US labor market data, which is expected to shape expectations for the Fed's policy stance heading into March. Market consensus points to a firm Nonfarm Payroll print and a stable unemployment rate, outcomes that could lend the US dollar modest near-term support. Beyond macroeconomic data, markets are also watching President Donald Trump's potential nominee for the Fed chair, which could be announced soon.
The ringgit ended the week sharply higher against the US dollar, strengthening on a week-on-week basis to close at 3.9440/9500 compared with 4.0045/0080 last Friday. The local note traded mostly higher against a basket of major currencies this week, appreciating against the British pound, euro, and improving in comparison to its ASEAN peers, including the Singapore dollar, Thai baht, Indonesian rupiah, and Philippine peso.