Melaka Political Goings-On Draw Attention

Spot USD/MYR trades flat at MYR4.1790 at typing, with domestic headline flow centred around the collapse of Melaka state government.

• The rate has been supported by its ascending 100-DMA, which today intersects at MYR4.1742. a break below that moving average would shift technical focus to Sep 10 low of MYR4.1300. Conversely, bulls need a rally above the 50-DMA/Sep 30 high at MYR4.1961/70 to gain some momentum.
• Melaka state legislature was dissolved Tuesday, setting the stage for a snap election to be held within two months. UMNO leader Zahid noted that the decision on whether voters will be able to cast their ballots within that timeframe will depend on assessment of federal health and electoral officials.
• The state election in Sarawak was put on hold earlier this year, owing to the local Covid-19 situation. PM Ismail Sabri noted that the authorities are wary of a potential repeat of Covid-19 resurgence observed after Sabah state election last year.
• The collapse of Melaka government earlier this week represented another spillover from infighting among UMNO factions, which brought down the Muhyiddin Cabinet after a prolonged period of political uncertainty.