KUALA LUMPUR, Dec 18 — The ringgit closed slightly lower against the US dollar today as traders adopted a cautious approach ahead of the United States Federal Open Market Committee (FOMC) meeting.

The FOMC’s policy decisions are typically announced on the second day of the meeting (today), with a press conference held by Federal Reserve (Fed) Chair Jerome Powell to provide further insights into the Fed’s strategy moving forward.

At 6pm, the local currency depreciated to 4.4670/4725 versus the greenback from Tuesday’s close of 4.4645/4690.

SPI Asset Management managing partner Stephen Innes said the market is widely anticipating a 25 basis points rate cut from the Fed this month, which could lend some support to the ringgit.

"However, significant uncertainty clouds future monetary policy due to the potential inflationary impact of tariff hikes by the incoming Donald Trump administration.

"Such measures could compel the Fed to moderate the pace of rate cuts in 2025, and posing challenges for the ringgit,” he told Bernama.

Innes said that the local currency has been trading within a narrow range today, indicating subdued market activity.

The ringgit was traded lower against other major currencies.

It was lower versus the British pound to 5.6673/6743 from 5.6646/6703, fell against the euro to 4.6877/6934 from 4.6815/6862, and diminished against the Japanese yen to 2.9074/9112 from 2.9028/9059 previously.

The ringgit was traded mixed against Asean currencies.

It appreciated against the Singapore dollar to 3.3045/3088 versus 3.3048/3087 and improved vis-à-vis the Philippine peso to 7.57/7.58 from 7.58/7.59 at yesterday’s close.

Meanwhile, the local note depreciated versus the Thai baht to 13.0378/0618 from 13.0236/0440, and eased against the Indonesian rupiah to 277.4/277.9 from 277.2/277.6 on Tuesday. — Bernama