KUALA LUMPUR – The ringgit closed higher against the US dollar for the second consecutive day as investors are more than happy to ride the vaccine and stimulus waves into year-end, supported by what is expected to be a dovish US Federal Reserve (Fed) retort at the end of its meeting today.
At 6pm, the ringgit closed at 4.0490/0540 versus the greenback, compared with 4.0530/0560 at the close on Tuesday.
Axi chief global market strategist Stephen Innes said the risk-reward for staying overly long US dollars into the key year-end Federal Open Market Committee (FOMC) meeting could be negative, hence the dollar should be less attractive heading into tonight’s meeting.
The two-day FOMC meeting is held on December 15 and 16.
The market is pessimistic on the outcome of the FOMC meeting, while the bond market could have a bumpy reaction depending on what the central bank says about its bond buying programme.
The Fed will release its statement at 2pm, and Fed Chairman Jerome Powell will hold a briefing at 2.30pm (US Eastern Standard Time).
Meanwhile, the ringgit traded easier against all other major currencies.
It slipped against the Singapore dollar to 3.0469/0518 from 3.0369/0396 at yesterday’s close and declined against the British pound to 5.4722/4806 from 5.3966/4026 on Tuesday.
The ringgit fell against the euro to 4.9418/9487 from 4.9272/9321 yesterday and depreciated against the Japanese yen to 3.9197/9253 from 3.8949/8989 previously. – Bernama, December 16, 2020
