Ringgit strengthens against dollar ahead of US rate decision

The ringgit opened firmer against the US dollar on Monday, reflecting cautious optimism ahead of the Federal Open Market Committee meeting scheduled later this week.

The local currency was quoted at 4.0630/4.0730 against the greenback, improving from Friday's closing levels of 4.0685/4.0725. The modest strengthening suggests sentiment remains constructive for regional currencies as traders position themselves before the Federal Reserve's interest rate announcement.

Markets are closely monitoring the FOMC's signals regarding future monetary policy. Any indication of a potential pause or slowdown in rate increases could support emerging market currencies like the ringgit, which have faced headwinds from elevated US borrowing costs.

Analysts note that currency movements ahead of major central bank decisions are typically measured, with investors preferring to avoid significant exposure until the Fed's stance becomes clearer. The ringgit's performance will also depend on domestic economic factors and regional sentiment toward Malaysian assets.