The ringgit extended last week's gains, opening stronger against the US dollar and a basket of major currencies, supported by a weaker US Dollar Index (DXY) amid expectations that tax cuts and spending are being discussed in the US Senate.
At 9.50am, the ringgit was at 4.2180, up 0.19% against the US dollar from its close of 4.2300 at last week's close.
The US DXY is currently hovering at 97.151 points, down 0.26% from its previous close.
Bank Muamalat Malaysia Bhd chief economist Dr Afzanizam Rashid said the US Senate is currently considering passing tax cuts, reducing Medicaid spending and lowering clean energy subsidies.
The decision is set to increase the US government's fiscal deficit and debt levels, with the Congressional Budget Office (CBO) projecting the bill will increase the deficit by nearly $3.3 trillion from 2025 to 2034, while 11.8 million Americans will be uninsured by 2034.
Afzanizam said the US government's credit matrix will weaken, which could add to pressure on the value of the US dollar.
At the open, the ringgit traded higher against a basket of major currencies and Asean countries.
It appreciated against the Japanese yen to 2.9185/2.9308 from 2.9359/2.9399, rose against the British pound to 5.7876/5.8116 from 5.8141/5.8217 and improved against the euro to 4.9472/4.9677 from 4.9597/4.9661 last Thursday.
Against its Asean peers, the ringgit rose against the Singapore dollar to 3.3067/3.3207 from 3.3192/3.3240 and rose against the Thai baht to 12.9179/12.9795 from 13.0254/13.0488 at Thursday's close.
It was marginally higher against the Indonesian rupiah at 260.4/261.7 from 260.9/261.4 and rose against the Philippine peso to 7.46/7.50 from 7.47/7.49 previously.
