Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit strengthened on optimism over the US Federal Reserve’s (Fed) monetary outlook, appreciating as high as RM4.1865 against the US dollar during the early morning session ahead of the federal open market committee decision tonight.

“The Fed is on track to deliver a 25 basis points rate cut tonight, which would bring the federal funds rate to between 3.75% and 4%.

“Should the Fed decide to cut the interest rate, the gap between the federal fund rates and the overnight policy rate would narrow from 150 basis points to 125 basis points.

“This would contribute positively to the ringgit’s appreciation,” he told Bernama.

At 6pm, the ringgit appreciated to 4.1850/4.1900 per US dollar from yesterday’s close of 4.1935/4.1985.

The ringgit traded higher by 1.02% over the past five days.

At the opening, the ringgit traded higher against most major currencies.

It rose against the Japanese yen to 2.7493/2.7528 from 2.7605/2.7640 at yesterday’s close, inched up against the British pound to 5.5326/5.5392 from 5.5845/5.5911 and climbed versus the euro to 4.8722/4.8780 from 4.8884/4.8942.

The local currency trended mixed against most Asean currencies.

It improved against the Singapore dollar to 3.2324/3.2365 from 3.2387/3.2431 at yesterday’s close and appreciated vis-a-vis the Indonesian rupiah to 251.8/252.2 from 252.4/252.9.

The ringgit eased against the Thai baht to 12.9651/12.9858 from 12.9214/12.9424 and slipped against the Philippine peso to 7.12/7.14 from 7.09/7.10 previously.