Kuala Lumpur: The ringgit strengthened against the US dollar in early trade after reaching a nearly three-week high last Friday, buoyed by softer-than-expected US economic data released last week. At 8 am, the ringgit strengthened to 4.4140/4225 from 4.4165/4200 at Friday's close.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid mentioned that the local currency is expected to maintain its positive trend today after the US dollar-ringgit broke through its previous support level of RM4.43 last week. He also noted that Malaysia's core inflation rate saw an uptick to 1.8 percent during January from 1.6 percent, driven by higher food inflation and a gradual increase in the transport sub-index.

Dr. Mohd Afzanizam further stated, "We believe that inflation expectation as the country awaits policy adjustment in fuel subsidies in the middle of this year. As such, the Bank Negara Malaysia is likely to keep the Overnight Policy Rate (OPR) steady at 3.00 percent throughout the year to strike the right balance between keeping the inflation risk at bay and supporting the growth, especially investment."

With concerns over inflation risks, the economist predicted that the ringgit could hover around RM4.40 to RM4.41 against the greenback. Meanwhile, the ringgit was traded mostly higher against major currencies, gaining against the British pound and the euro, although it slipped against the Japanese yen.

The ringgit weakened against most ASEAN currencies, depreciating against the Singapore dollar and the Thai baht. However, it was marginally higher against the Indonesian rupiah and remained flat against the Philippine peso.