The ringgit is likely to sustain its upward momentum against the US dollar next week, driven by positive market sentiment ahead of key economic data releases, according to an analyst.

Chief economist at Bank Muamalat Malaysia Bhd, Mohd Afzanizam Abdul Rashid, noted that investor attention will primarily be on Malaysia's second-quarter's GDP, set to be released next Friday. In addition, the US Consumer Price Index (CPI) for July, scheduled for release on Wednesday, will be another crucial factor. Market consensus expects the CPI to moderate to 2.9%, down from 3.0% in June.

Kenanga Investment Bank Bhd (Kenanga IB) cautioned that despite the ringgit's bullish momentum, the US dollar might regain its appeal as a safe-haven currency. This is partly due to lower-than-expected US weekly initial jobless claims and expectations of a favorable US CPI, which could reduce the likelihood of aggressive interest rate cuts by the Federal Reserve. It also maintains its forecast for two rate cuts by the US Federal Reserve, especially considering the political and geopolitical risks on the horizon. This environment might cause the ringgit to fluctuate between 4.45 and 4.55 against the US dollar in the coming weeks, with the local currency continuing to benefit from positive domestic macroeconomic factors.

Throughout the past week, the ringgit has shown firm trading, starting strong on Monday by reaching the 4.4000 level against the US dollar, bolstered by disappointing US jobs data for July. The currency then corrected as the US Dollar Index rebounded mid-week but ended the week on a stronger note. The past 7-days sees the ringgit appreciated to 4.4200/4280 against the US dollar, up from 4.4945/4995 the previous week. It also gained ground against a range of other major currencies, including the euro, British pound, and Japanese yen.

The ringgit also strengthened against most ASEAN currencies, rising against the Singapore dollar and Thai baht, while showing slight declines against the Indonesian rupiah.