KUALA LUMPUR: The ringgit rebounded by 0.13% against the US dollar, gaining alongside most Asian currencies on Wednesday.
At 6pm, the local currency rose to 4.1720/1750 from 4.1800/1830 against the greenback on Tuesday.
FXTM market analyst Han Tan said risk assets have been energised by the resurrected prospects of the eagerly anticipated Donald Trump and Xi Jin Ping meeting, which could help support risk sentiment leading up to the G20 summit next week.
“However, another major catalyst for the ringgit’s performance looms, being the Federal Reserve’s policy announcement and US economic outlook, due in the early hours tomorrow,“ he told Bernama in an email.
The US central bank appears unlikely to adjust its monetary policy settings after the current meeting, with markets just pricing in a 23% chance of a US interest rate cut this week.
Tan also noted that the greenback is anticipated to weaken further, allowing the ringgit to return to the 4.16-4.17 range, if the Federal Reserves unexpectedly announces a lower US interest rate on Thursday.
“Investors will certainly be scrutinising the Federal Reserve’s tone when conveying its policy stance, whereby a less-dovish-than-expected assessment by Fed chair Jerome Powell could buffer the dollar’s resilience and prompt a weakening bias for Asian currencies, including the ringgit,“he added.
At the close, the ringgit traded mixed against a basket of major currencies.
The local currency weakened to 5.2459/2505 from 5.2355/2409 against the pound yesterday, and also fell against the Singapore dollar to 3.0508/0535 from 3.0471/0497 previously.
The ringgit was higher at 3.8476/8515 against the yen from 3.8596/8635 yesterday and against the euro, the local currency was traded at 4.6731/6781 from 4.6745/6795. — Bernama
