Budget 2027 optimism lifts ringgit despite external headwinds

The ringgit edged higher against the US dollar at the opening, buoyed by optimism surrounding Budget 2027.

At 8am, the ringgit was up marginally against the greenback to 4.0815/4.0900 from Monday’s close of 4.0820/4.0865.

Nevertheless, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said heightened geopolitical risk in the Middle East and the anticipation of higher US inflation are expected to support the US dollar.

He said the situation in Riyadh, Saudi Arabia, following the missile attacks suggested that the current situation could potentially morph into a wider conflict, leading to further disruption to crude oil supplies.

“Brent crude oil prices have already risen by 1.38% to US$106.16 per barrel. Thus far, the US Dollar Index (DXY) has risen by 0.35% to 102.573 points, while the US Consumer Price Index (CPI) inflation rate, to be released on Wednesday, is expected to increase to 3.6% in September (August: 3.4%), based on consensus estimates.

“On that note, the ringgit will likely continue trading within a narrow range,” Afzanizam said.

At the opening, the ringgit traded mostly firmer against a basket of major and Asean currencies.

The local note fell against the Japanese yen to 2.5748/2.5803 from 2.5739/2.5769 at Monday’s close, climbed against the British pound to 5.3913/5.4025 from 5.4017/5.4077, and strengthened against the euro to 4.5545/4.5640 from 4.5637/4.5687 at Monday’s close.

Against its Asean peers, the local note edged up against the Indonesian rupiah to 227.8/228.4 from 227.9/228.2, but was almost flat against the Philippine peso at 6.50/6.52 compared with 6.50/6.51 at Monday’s close.

The ringgit edged up against the Singapore dollar to 3.1864/3.1933 from 3.1873/3.1911 at Monday’s close and strengthened against the Thai baht to 12.1318/12.1628 from 12.1391/12.1568.