KUALA LUMPUR: The ringgit extended last week's gains, opening stronger against the US dollar and a basket of major currencies, and supported by a softer US Dollar Index (DXY) amid expectations of tax and spending cuts being deliberated in the United States’ Senate.
At 8.01 am, the ringgit rose to 4.2190/2365 against the US dollar from Thursday’s close of 4.2300/2355.
The US DXY is currently hovering at 97.151 points, down by 0.26 per cent from the previous close.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Senate is currently considering passing tax cut measures, reducing Medicaid spending and lowering subsidies on clean energy.
"All this is expected to raise fiscal deficits and US govt debt level, with the Congressional Budget Office (CBO) projecting the bill would increase the deficits by nearly US$3.3 trillion from the year 2025 to 2034, while 11.8 million Americans would become uninsured by 2034," he told Bernama.
The deadline for the bill is set for July 4, 2025.
Mohd Afzanizam said the US government credit matrix would be weakened, which could add further pressure on the value of the US dollar.
"Ringgit has gained 0.1 per cent to RM4.2327 on Thursday. We opined that the ringgit will continue to gain strength against the US dollar and would hover around RM4.22 to RM4.23," he said.
At the opening, the ringgit traded higher against a basket of major currencies and ASEAN countries.
It appreciated against the Japanese yen to 2.9185/9308 from 2.9359/9399, increased versus the British pound to 5.7876/8116 from 5.8141/8217 and improved against the euro to 4.9472/9677 from 4.9597/9661 last Thursday.
Against its ASEAN peers, the ringgit rose vis-à-vis the Singapore dollar to 3.3067/3207 from 3.3192/3240 and gained against the Thai baht to 12.9179/9795 from 13.0254/0488 at Thursday’s close.
It is marginally higher against the Indonesian rupiah at 260.4/261.7 from 260.9/261.4 and inched up against the Philippine peso to 7.46/7.50 from 7.47/7.49 previously. - Bernama
