At 5pm, the ringgit was quoted at 3.3725/3755 to the US dollar, up from Tuesday's closing of 3.3835/3865.
RHB Bank dealer Nur Adeline Baharin said expectation of an interest rate hike helped to beef up investors' confidence.
"With the good news, we will see the ringgit strengthening further today to hit the 3.36 level," Nur Adeline said.
The US dollar, seen as a safe haven during economic crisis, came under pressure due to optimism over economic recovery, she said, adding that traders had started unloading the greenback and shifted to buying high-yielding currencies.
"Investors are continuing to sell the dollar to invest in other areas as stocks, oil and gold," Nur Adeline said.
In late trading session on Tuesday, the ringgit was, however, lower against other major currencies except for the Singapore dollar.
The local currency was higher against the Singapore dollar at 2.4032/4081 compared to 2.4046/5091 on Tuesday but it declined against the Japanese yen to 3.8005/8044 from 3.7978/8029 previously.
The ringgit weakened against the euro to 5.0666/0721 from 5.0521/0576 on Tuesday and also against the British pound to 5.5930/5964 from 5.5630/5677 previously.
SHORT-TERM rates ended steady yesterday as Bank Negara Malaysia (BNM) continued to intervene in the money market to absorb surplus funds, dealers said.
The overnight, one-week, two-week and three-week rates remained at 2 per cent, 2.03 per cent, 2.05 per cent and 2.07 per cent respectively.
The liquidity surplus in the conventional system dropped to RM29.68 billion from the RM53.1 billion estimated earlier.
For Islamic funds, the total liquidity surplus, declined to RM14.1 billion from an earlier estimate of RM17.02 billion.
The central bank also conducted a late conventional tender for RM18 billion of one-day money and an Al-Wadiah tender for RM11 billion of one-day money.
THE three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) futures on Bursa Malaysia Derivatives closed untraded yesterday, dealers said.
The five-year Malaysian Government Securities futures were also untraded throughout the day.
The underlying three-month KLIBOR stood at 2.26 per cent today. - Bernama