Emerging-markets currencies strengthened against the dollar Wednesday as investors closed out short positions ahead of a decision from Federal Reserve policy makers on whether or not to raise interest rates. The Fed's rate-setting committee began its two-day policy meeting on Wednesday, and will announce its decision at 2 p.m. Eastern when it releases its policy statement. The statement will be followed by a press conference with Fed Chairwoman Janet Yellen. The Russian ruble was the day's best performer, rising 2.4% to trade at 65.25 rubles to the dollar, its highest level in two weeks, as crude oil prices rose. The Malaysian ringgit was up 1.4% to 4.22 ringgit to the dollar, its highest level in nearly two weeks. The South African rand also rose to a two-week high of 13.28 to the dollar. It was up 1.4% on the day. The jump in emerging-markets currencies may reflect growing expectations that the Fed will leave rates unchanged. These currencies have been battered by U.S. rate-hike expectations, as higher interest rates in the U.S. would make assets denominated in emerging-markets currencies less attractive by comparison.
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