The ringgit started the day stronger against the US dollar, trading at 4.4575/4700 at 8 am compared to Monday's close of 4.4645/4700, amid global economic uncertainties and heightened geopolitical tensions.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit is in an oversold position, which could attract traders. "This may entice traders to accumulate the ringgit, given that Bank Negara Malaysia (BNM) is not inclined to ease its monetary policy stance next year. This contrasts with regional peers such as Indonesia, the Philippines, and Thailand, which have already begun their interest rate cut cycles this year," he told Bernama.

On the external front, Afzanizam said the US dollar remains favourable due to the US Federal Reserve's (Fed) expected gradual monetary easing in 2025. He added that the Fed is likely to keep the Federal Funds Rate (FFR) above its neutral level, which hovers around 3.00%. "A further 50 basis points cut could leave the FFR at 4.00% in 2025, suggesting monetary policy will remain restrictive. On this basis, the ringgit-US dollar pair could oscillate around RM4.46 today," he said.

The ringgit also posted gains against most other major currencies. It strengthened against the British pound to 5.5933/6090 from 5.6146/6215 and appreciated against the euro to 4.6385/6515 from 4.6583/6640. However, it marginally weakened against the Japanese yen, trading at 2.8388/8471 compared to 2.8278/8314 previously.

Against ASEAN currencies, the ringgit saw improvement. It rose against the Singapore dollar to 3.2788/2882 from 3.2890/2935, the Indonesian rupiah to 276.1/277.0 from 276.5/277.0, the Thai baht to 13.0428/0905 from 13.0905/1139, and the Philippine peso to 7.69/7.72 from 7.70/7.72.