"We still expect the ringgit to trade in the weaker half of its long-term trading band between 3.80 and 4.50 in 2020," the agency said in a report.
Its view for more weakness over the coming quarters is also supported by Malaysia's poor exports outlook.
"The goods balance has weakened since the first quarter 2018, from 9.1 percent of gross domestic product (GDP) to 8.2 percent in the second quarter 2019," it said, adding that the exchange rate is a natural adjustment mechanism and is likely to continue remaining weak over the coming quarters, helping to put a floor to the deterioration of the trade balance.
However, weakness in the ringgit is likely to be limited by its relative undervaluation in real effective exchange rate (REER) terms. The spot REER was 6.6 percent below its 10-year moving average in August, according to the report.
"Malaysia's increasing resilience to capital outows is also likely to help keep the ringgit within its long term trading range," said Fitch Solutions, adding that the country's foreign direct investment has steadily become a larger share of Malaysia's international liabilities, while "hot" money has shrunk since 2018.
The agency also maintains 2021 average forecast for the ringgit at 4.20.
According to Malaysian Central Bank, the ringgit fell slightly to 4.1935 against the U.S. dollars as of 12 p.m. Thursday, from 4.1850 on previous day.