The ringgit opened higher against the US dollar on the first trading day of Budget 2025 week, boosted by confidence that the government is likely to maintain fiscal discipline and keep the fiscal deficit below four percent of Gross Domestic Product (GDP) growth next year.
At 10.20am, the ringgit was at 4.2910 which is a 0.16% drop against the USD from where it closed at 4.2865 last Friday.
Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid said attention to Friday's budget announcement will drive market sentiment this week.
Global sentiments such as the speech of China's Ministry of Finance over the weekend show commitment in reviving their economy, especially the weak real estate market.
He also said that the core inflation rate was at 0.1% down from 0.3% previously.
Mohd Afzanizam said the situation in China seems to favor the US dollar as the US economy is seen as more resilient and the US Fed may avoid aggressive rate cuts.
The US Dollar Index (DXY) is currently hovering at 103.021 points.
Given this, the ringgit is likely to trade cautiously due to concerns over the Chinese economy.
Meanwhile, the ringgit is stronger against a group of major currencies.
It was higher against the euro at 4.6784/6958 from 4.6886/6935 at Friday's close, slightly higher against the Japanese yen at 2.8701/8810 from 2.8780/8812 last Friday and rose against the British pound to 5.5894/6102 from 5.6016/6075 previously.
However, the local currency traded mixed compared to Asean currencies.
It strengthened against the Singapore dollar to 3.2788/2915 from 3.2824/2861, but eased against the Thai baht to 12.8741/9334 from 12.8504/8704 last Friday.
The ringgit was little changed at 7.49/7.52 from 7.49/7.50 against the Philippine peso and lower against the Indonesian rupiah at 275.0/276.1 from 275.1/275.5 on Friday.
