Reports indicate that the US federal government risks a shutdown if Congress does not reach a funding agreement before the new fiscal year starts on Oct 1.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said an indication from US vice-president JD Vance that a government shutdown seems likely has taken a toll on the US dollar.

“The US Dollar Index (DXY) fell 0.21% to 97.699 points, as this event appears to increase the likelihood of a US interest rate cut,” he told Bernama today.

At 6pm, the local currency rose to 4.2050/4.2090 against the greenback compared with Monday’s close of 4.2150/4.2200.

At the close, the ringgit was mixed against a basket of major currencies.

It appreciated to 5.6532/5.6586 against the British pound from 5.6612/5.6679 at yesterday’s close, weakened to 2.8420/2.8447 against the Japanese yen from 2.8365/2.8400, and weakened slightly to 4.9405/4.9452 versus the euro from 4.9387/4.9446.

The local currency was traded mostly higher against Asean currencies.

It advanced to 3.2604/3.2638 vis-a-vis the Singapore dollar from 3.2664/3.2706 at yesterday’s close, edged up against the Indonesian rupiah to 252.3/252.6 from 252.6/253.1 previously, and inched up versus the Philippine peso to 7.22/7.24 from 7.25/7.26 at yesterday’s close.

The ringgit also appreciated to 12.9744/12.9927 against the Thai baht from 13.0649/13.0857 previously.