The ringgit hit a two-month high, strengthening past a chart resistance, as speculators cut dollar holdings on overall weakness in the greenback, but investors hesitated to push the Malaysian currency higher on concerns over a coming election.
The ringgit advanced 0.4 percent to 3.0800 per dollar, its strongest since Jan. 31.
As of 0549 GMT, the Malaysian currency stood at 3.0850, firmer than a current 200-day moving average at 3.0864. It has been closing daily sessions weaker than the average since early March.
"Today, we went below a 200-DMA line. It is not good for dollar long positions. There is no reason to buy the dollar," said a Malaysian bank trader in Kuala Lumpur.
But the trader said investors stayed wary of the coming national vote following a New Straits Times report that the parliament is expected to be dissolved as early as Wednesday after a cabinet meeting, paving the way for the general election.
If the parliament is dissolved on Wednesday, nomination of candidates is likely to be later next week, while polling day would be on April 27 at the latest, the New Straits Times said.
The ringgit also has a chart resistance around 3.0800 and 3.0830, analysts said.
The Malaysian currency had tried to strengthen past the area three times in early February, but it failed, resulting in a drop to 3.1390.
Malaysia's financial markets were caught napping in 2008 when shock electoral gains by the opposition redrew the country's political map and sparked a 10 percent one-day plunge in the main index.
But some traders and analysts have said uncertainties about the coming election have been priced into the ringgit.