KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim expressed confidence that the strengthening of the ringgit will further enhance foreign investor confidence in Malaysia.

He noted that his recent statements about the ringgit had been misunderstood.

"I never said that the ringgit is the strongest currency in Asia. What I actually said is that the ringgit has shown the highest increase in Asia.

"So, if you want to criticise, that's fine, but refer to the accurate statement," he said, when met by reporters after the launch of the guidelines on the management and governance of federal statutory bodies.

Anwar urged the public to listen to his speech in full before drawing any conclusions.

Recently, Anwar said the ringgit is on its best track in 14 years due to the collective efforts of all parties.

He said the strength of the domestic economy, combined with the strategic measures implemented by the Ministry of Finance (MoF), its departments, and agencies, has been key in bolstering the value of the ringgit.

In a note today, Kenanga Research expect a neutral-to-bullish outlook on ringgit for next week, with the pair likely to gravitate towards its five-day exponential moving average (EMA) of 4.486.

The firm said while it remains bullish on the ringgit in the coming months, current US recession fears are overstated and the market is pricing in more Federal Reserve (Fed) rate cuts than necessary.

"The lower-than-expected US weekly initial jobless claims yesterday, combined with a potential 0.2 per cent month-on-month (MoM) increase in US core inflation next week, could temper expectations for aggressive rate cuts, allowing the US dollar to regain some of its safe-haven appeal.

"Our projection remains for two rate cuts by the Fed, particularly given the political and geopolitical risks on the horizon.

"This environment may cause the ringgit to fluctuate between 4.45 to 4.55 against the US dollar in the coming weeks, with the ringgit continuing to benefit from favourable domestic macro," it noted.

Adding further, Kenanga said last Friday's weaker-than-expected US jobs report has substantially influenced expectations for the Fed's policy direction, with the market now pricing in a 50 basis points (bps) rate cut in Sept.

This shift has dragged the US dollar Index (DXY) down to 102.7 and pulled the 10-year US Treasury yield below 3.8 per cent on Monday, driving the ringgit to a stronger-than-expected level of 4.43 per US dollar.

Subsequently, the firm said the ringgit corrected to around 4.70 to 4.50 as the DXY rebounded above 103.0, spurred by a recovery in US services sector activity, which eased recession fears.

It also said a tech-driven sell-off and the unwinding of yen carry trades have exerted further downward pressure on the DXY.

https://www.nst.com.my/business/economy/2024/08/1089337/anwar-strengthening-ringgit-will-enhance-foreign-investor