Ringgit Unfazed By MCO Extension, Tensions Between Ruling Coalition Partners Resurface

Spot USD/MYR is rangebound after yesterday's announcement re: extension of Malaysia's Covid-19 restrictions. The pair sits at MYR4.0463, little changed on the day, with bulls looking for a break above the 50-DMA/Jan 29 high at MYR4.0522/4.0560 before setting their sights on Jan 12 high of MYR4.0760. Conversely, a fall through Jan 21/29 lows of MYR4.0290/4.0285 would give bears a signal to take aim at Jan 4 cycle low of MYR3.9957.

• Malaysian Defence Min Ismail Sabri Yaakob said Tuesday that the government decided to extend its Movement Control Order (MCO) through Feb 18 and left a ban on inter-state travel in place. The gov't moved to tighten the Covid-19 Standard Operating Procedure, requiring individuals and businesses to observe stricter rules.
• FinMin Zafrul said that Malaysia has learnt "valuable lessons" from its first MCO imposed last year and can still meet its growth targets for 2021.
• Local press reported that Malaysia's ruling coalition partners are wrestling over seat allocation for the next general election. An unidentified source told The Star that "the seats held by former Umno MPs who crossed over to Bersatu were proving to be a contentious point, with Umno wanting those seats back, while Bersatu felt that if the candidates were not the incumbents, then the Perikatan Nasional coalition was likely to lose the fight."
• With nothing much left on the local docket this week, focus turns to next week's industrial output.