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THE ringgit opened stronger against the US dollar on Tuesday, buoyed by growing concerns over a potential United States government shutdown which has begun to exert downward pressure on the greenback.
At 8am, the Malaysian currency stood at 4.2125/2210 against the dollar, improving from Monday’s close of 4.2150/2200.
Analysts attributed the gains to market anxiety over stalled budget negotiations in Washington, with the US Congress racing against the clock to approve a funding bill before the new fiscal year begins on 1 October.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, described the looming shutdown as significant, particularly for financial markets that rely on timely data.
“A US government shutdown would be significant, as it could hamper the functioning of key agencies such as the Bureau of Labor Statistics,” he told Bernama. “If materialised, it would result in difficulties in discerning the latest trend in the US labour market at a time when the Federal Reserve has highlighted increased downside risks to employment.”
He added that the release of critical economic indicators, including the much-anticipated US nonfarm payroll report scheduled for this Friday, could be delayed.
The US Dollar Index (DXY) reflected the market unease, slipping by around 0.25 per cent to 97.906 points.
“The ringgit, which gained 0.12 per cent to RM4.2175 against the US dollar yesterday, is expected to trade between RM4.20 and RM4.21 today,” said Dr Afzanizam. “Again, the ringgit could attempt to breach the psychological level of RM4.20, especially if the Fed proceeds with interest rate cuts should a government shutdown occur.”
At the opening bell, the ringgit was also broadly higher against most major and regional currencies.
Against the Japanese yen, it rose to 2.8340/8399 from 2.8365/8400, and firmed to 5.6582/6696 against the British pound from 5.6612/6679. However, it weakened slightly against the euro at 4.9404/9504 compared to 4.9387/9446 at the previous close.
In regional trade, the local note edged higher to 3.2653/2723 versus the Singapore dollar from 3.2664/2706, improved to 252.5/253.1 against the Indonesian rupiah from 252.6/253.1, and appreciated against the Philippine peso at 7.24/7.26 from 7.25/7.26. It was, however, marginally softer against the Thai baht at 13.0669/1002 compared to 13.0649/0857. - September 30, 2025