Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the ringgit has breached the 4.20 psychological threshold, indicating that the recent rally may be short-lived as the Fed maintains a cautious stance on monetary easing.

“The RM4.20 level per dollar appears to be a key psychological point, which the ringgit may intermittently surpass when expectations of a US rate cut intensify.

“We foresee emerging market currencies, including the ringgit, would gain further traction if traders and investors sense that the Fed could be behind the curve,” he told Bernama.

At 6pm, the local note stood at 4.2040/4.2115 against the US dollar, down from yesterday’s close of 4.1945/4.1995.

At the close, the ringgit traded higher against major currencies.

It strengthened versus the Japanese yen at 2.8419/2.8471 from 2.8484/2.8520, improved to 5.6775/5.6876 against the British pound from 5.7238/5.7306 yesterday and gained vis-à-vis the euro to 4.9447/4.9536 from 4.9654/4.9714 previously.

Meanwhile, the local note traded mixed against Asean currencies.

It appreciated against the Singapore dollar at 3.2744/3.2805 from 3.2800/3.2842 yesterday and rose to 253.2/253.8 against the Indonesian rupiah from 253.7/254.2 previously.

However, it depreciated against the Thai baht at 13.1973/13.2271 from 13.1903/13.2114 yesterday, and declined vis-a-vis the Philippine peso to 7.36/7.38 compared with yesterday’s close of 7.35/7.36.