Ringgit Undermined By Malaysia's Political Turmoil, Covid Situation

Spot USD/MYR has added 45 pips in early Asia-Pac trade and last sits at MYR4.2250, tracking gains registered by the greenback after Malaysia hours last Friday. The ringgit is further undermined by Malaysia's increasing political unrest, which unfolds at a time when the country's daily Covid case count is on the uptrend.

• Bulls need a firm push through Jul 29 high of MYR4.2405 to bring Jul 21 cycle high of MYR4.2440 into play. On the flip side, a dip through Jul 30 low of MYR4.2188 would clear the way to Jul 15 low of MYR4.1955.
• Malaysia reported another record-breaking increase in Covid-19 infections on Saturday, declaring 17,786 new cases, before the daily count eased slightly to 17,150 on Sunday.
• The parliament sitting was adjourned again, drawing the ire of opposition lawmakers, who accused the government of dodging democratic scrutiny and threatened to show up anyway.
• Malaysia's Markit M'fing PMI improved to 40.1 in July from 39.9 prior, pointing to a second back-to-back month of contraction in the sector. IHS Markit noted that the "manufacturing sector continued to be badly hit by the ongoing pandemic in July, though companies are already planning for better times ahead".
• Elsewhere, Intertek data suggested that Malaysia's palm oil exports shrank 5.21% M/M in July. This comes after AmSpec data showed a 7.7% M/M contraction in shipments.
• Vaccine czar Khairy expressed optimism about meeting the target of fully vaccinating half of Malaysia's adult population by the end of this month, as 29% have already received two doses. Separately, Khairy said that the gov't is finalising looser operating procedures for fully vaccinated individuals, which will be soon announced by PM Muhyiddin.