The USD/MYR currency pair was mostly flat on Wednesday, holding not far from a fresh 1-month high of 4.4730, ahead of the outcome of the Federal Reserve’s two-day policy meeting.

The Fed is widely expected to cut its federal funds rate target range by 25 basis points to 4.25%-4.50% later today.

Still, investor focus will be on the extent of rate cuts forecast for 2025.

A slower pace of rate cuts would underpin the US Dollar and mount more pressure on emerging market currencies, while faster rate cuts would provide certain support to the latter.

“Worst case scenario for EM assets would be the Fed decides to hold the policy rate, upgrades the economic outlook and reduce the number of rate cuts vs the September Dot plot,” Krung Thai Bank’s Poon Panichpibool was quoted as saying by Reuters.

The minutes from the Fed’s November 6th-7th meeting showed policy makers were optimistic that inflation was subsiding and the labor market remained resilient. That supported the case of more interest rate cuts, but at a measured pace.

Meanwhile, the latest data out of Malaysia showed that the nation’s trade surplus had widened to MYR 15.3 billion in November from MYR 12.1 billion in the same month a year ago.

The USD/MYR currency pair was last little changed on the day to trade at 4.4655.