KUALA LUMPUR, Feb 6 (Bernama) -- The ringgit closed lower against the US dollar today as the greenback strengthened, driven by upbeat US economic data and ongoing concerns over the 2019 novel Coronavirus outbreak, dealers said.
Payroll processor ADP reported that US private sector employment increased by 291,000 jobs in January, its highest rate since May 2015, while economic activity in the manufacturing sector, as reported by the Institute for Supply Management, rebounded in January after a five-month contraction.
At 6 pm, the ringgit was quoted at 4.1200/1250 against the US dollar from 4.1150/1200 on Wednesday.
A dealer said investors are looking beyond the coronavirus concerns for now but reckon that the lack of positive virus-related headlines thus far would risk sending markets easily back into a risk-off mode.
The US non-farm payrolls job report to be released tomorrow is expected to be a key market driver, she said.
Meanwhile, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said demand for safe-haven currencies had prevailed with the US dollar index up at 98.3 points with decent US economic data thus far.
“As such, the ringgit had surpassed its previous resistance level of RM4.1192 against the US dollar and is currently hovering at RM4.122. The next resistance level is at around RM4.1406,” he told Bernama.
Afzanizam said the market is now looking at February numbers for a better sense of the impact of the coronavirus on the global economy.
“Judging from the impact on the tourism-related industries such as airlines, accommodation, and travel agencies, the impact can be quite significant in the short term.
“However, strong commitment from China’s government to contain the spread of the virus and its central bank’s resolve to inject liquidity in the banking system should give some relief to the market,” he noted.
Against other major currencies, the ringgit was traded higher.
It rose against the Singapore dollar to 2.9739/9786 from 2.9817/9857 on Wednesday and appreciated vis-a-vis the Japanese yen to 3.7495/7555 from 3.7511/7560 yesterday.
The local currency also strengthened versus the euro to 4.5312/5375 from 4.5364/5435 yesterday and increased against the British pound to 5.3445/3526 from 5.3767/3836.
Ringgit, forex, Bank Islam, US dollar, Coronavirus, US economic data,