Kuala lumpur: The ringgit strengthened against the US dollar in early trade on Thursday, supported by improved market sentiment following the latest fiscal support measures. At 8.07 am, the local note rose to 4.2140/2320 against the greenback from Wednesday's close of 4.2255/2300.

According to BERNAMA News Agency, SPI Asset Management managing partner Stephen Innes highlighted that a RM100 cash handout for all adult Malaysians and a plan to lower fuel prices, announced by Prime Minister Datuk Seri Anwar Ibrahim, are likely to enhance the local economy. Innes noted that the ringgit opened a touch firmer, albeit cautiously, as traders considered the absence of a formal US-Malaysia trade deal amidst speculation that one may soon materialize.

Optimism persists due to the recent US-Japan agreement and the potential for a US-European Union (EU) pact, contributing to a sustained risk appetite in the market. Meanwhile, Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, pointed out that expectations of a US-EU trade deal have buoyed sentiment in US benchmark equities, with US Treasury bond yields also rising.

Dr. Mohd Afzanizam added that the financial markets appear to be in a risk-on mode, which resulted in a 0.18 percent drop in the US Dollar Index to 97.214 points. Consequently, the ringgit is expected to remain positive, with the US dollar/ringgit exchange rate likely to fluctuate between RM4.22 and RM4.23.

At the market opening, the ringgit was stronger against a basket of major currencies, advancing against the Japanese yen and slightly higher against the British pound. However, it eased slightly against the euro. The local note also showed strength against regional peers, appreciating against the Singapore dollar, Indonesian rupiah, Philippine peso, and Thai baht.