Kuala lumpur: The ringgit opened higher against the US dollar on improved local market sentiment, supported by positive remarks from Bank Negara Malaysia (BNM) and expectations of a shift in US Federal Reserve policy, analysts said. At 8 am, the ringgit was quoted at 4.2220/2315 against the greenback, strengthening slightly from 4.2265/2295 at yesterday's close.

According to BERNAMA News Agency, an analyst indicated that market sentiment improved following comments by BNM governor Datuk Seri Abdul Rasheed Ghaffour, who noted that the ringgit has the potential to appreciate to RM4 against the greenback by year-end. Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid stated that while the US Dollar Index (DXY) continues to rise amid the ongoing US government shutdown, the trend may not be sustainable. He mentioned that Philadelphia Federal Reserve President Anna Paulson hinted at lowering interest rates towards a more neutral level due to manageable inflationary impacts from tariffs.

Dr Mohd Afzanizam further explained, "As such, the rise in DXY seems unsustainable. Should the US government shutdown be resolved, DXY could experience a correction. For now, it remains dollar-positive. Hence, expect the US dollar-ringgit pair to hover around RM4.22 today," he told Bernama.

Meanwhile, the ringgit showed strength against a basket of major currencies. It rose against the euro to 4.8832/8942 from 4.9006/9041 at Monday's close, firmed versus the Japanese yen to 2.7694/7758 from 2.7775/7796, and improved against the British pound to 5.6292/6419 from 5.6369/6409.

Against ASEAN currencies, the ringgit also traded higher. It appreciated versus the Thai baht to 12.9517/9888 from 12.9878/13.0030, advanced against the Singapore dollar to 3.2507/2588 from 3.2562/2587, gained versus the Philippine peso to 7.25/7.27 from 7.26/7.26, and strengthened against the Indonesian rupiah to 254.7/255.4 from 255.0/255.3.