UOB Economic Treasury Research, in its Quarterly Global Outlook report here, said most Asian central banks have already made some cuts to their respective interest rates this year in response to the economic uncertainties.
However, more aggressive easing is unlikely unless growth outlook turns sharply lower from here, it said.
"In the coming months, barring major shocks from Europe, it looks like Asian currencies will strengthen further against the greenback. The only question is the policy tolerance, as Asian economies are expected to slow and exporters will be burdened further by a stronger domestic currency just when demand is waning," it said.
It said the amount of monetary easing in the US and the European Union (EU) should keep the Asian central banks on a look-out for risks to asset prices and even consumer price inflation ahead.
"Global economic weakness could start to be a greater drag on sentiment in the fourth quarter 2012 with near-term liquidity risks been more or less eliminated by the policy responses in the US and the EU," it said.
In Malaysia, while the economic out-performance will be positive for the ringgit, the upcoming general election will still pose some risks.
"We now see the US dollar/ringgit moving towards our end-fourth quarter 2012 target of 3.10," the research house said.
On a Friday-to-Friday basis, the ringgit closed higher against the US dollar at 3.0535/0565 compared with 3.0570/0600 previously.
It rose against the Singapore dollar to 2.4868/4876 versus last week's close of 2.4947/4992 and improved against the yen to 3.8931/8982 compared with 3.9584/9646 previously.
The local currency also appreciated against the British pound to 4.9416/9474 from 4.9819/9893 last Friday but eased against the euro to 3.9705/9744 versus 3.9513/9571 previously.
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