Ringgit Pressured After Malaysia Extends Movement Restrictions

Spot USD/MYR has inched higher this morning, but remains trapped within yesterday's range. The ringgit is the worst performer in Asian EM space after Malaysia extended movement curbs in Kuala Lumpur and other regions, which has seemingly outweighed the impact of overnight risk-on moves.

• On Monday, Malaysian Defence Min Ismail Sabri Yaakob said that restrictions on movement in Kuala Lumpur, Sabah and Selangor will be extended by two weeks. Restrictions had been initially implemented until Dec 31, but will now remain in place through Jan 14.
• The decision came after Malaysia declared a record spike in new Covid-19 cases on Saturday, when it added 2,235 new patients to its overall tally. Defence Min Ismail refused to rule out further tightening of procedures. ""If cases soar and the Health Ministry wants us to review the SOP (standard operating procedures), we will do so," he told reporters at a briefing.
• Meanwhile, the country's Director-General of Health warned that the increase in the number of positive Covid-19 cases has led to delays in transferring some patients in the Klang Valley.
• USD/MYR sits +50 pips at MYR4.0535 at typing. Bulls would be pleased by a break above the 23.6% recovery of the Nov 4 - Dec 18 slide at MYR4.0649, followed by Dec 23/15 highs of MYR4.0673/75. Conversely, a dip through Dec 18 cycle low of MYR4.0310 would allow bears to return into the driving seat.
• The next point of note on Malaysia's economic docket is Markit M'fing PMI, due next Monday.