USD/MYR Tests Cycle Lows, UMNO Calls For Snap Election

USD/MYR remains heavy, last trades -85 pips at MYR4.0118, hovering just above a cycle low printed before the holiday break.

• Malaysia's Markit M'fing PMI came in at 49.1 in Dec (four-month high) vs. 48.4 registered in Nov, falling short of expansionary territory. On the plus side, IHS Markit noted that "job losses have eased and manufacturers remain optimistic on balance that output will continue to recover in 2021."
• Local media cited UMNO party leader as calling for a snap general election despite the ongoing Covid-19 pandemic. Malaysia's largest political party pledged to contest all of the seats it won in 2018.
• Before the weekend, Malaysia and Singapore announced that they decided to scrap a joint multi-billion-dollar rail project after struggling to reach agreement over amendments proposed by Malaysia.
• A clean break under Dec 31 low of MYR4.0115, which has cushioned losses thus far, would bring Jul 10, 2018 low of MYR4.0083 into play. Conversely, a jump above Dec 23 high of MYR4.0673 would give bulls some reprieve.
• Malaysia releases its weekly update on foreign reserves Friday.