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Ringgit steadies as Johor election supports policy continuity
OCBC says USD/MYR faces two way risks, with near term focus shifting to Negeri Sembilan elections on Aug 1.
OCBC strategists Sim Moh Siong and Christopher Wong said Malaysia’s Johor election result is likely to limit immediate pressures on the Malaysian ringgit, with the policy outlook in Johor expected to remain consistent. They noted Barisan Nasional won 48 of 56 seats in Johor, up from 40 previously, while Pakatan Harapan took the remaining eight, reinforcing UMNO’s political momentum and bargaining position within the federal unity government.
In their view, the MYR reaction should be largely contained because the result does not change the federal government’s parliamentary majority, even though PH’s weaker performance could add to coalition strains. The strategists flagged potential uncertainty ahead of additional state elections in Negeri Sembilan on Aug 1, which they said could contribute to modest near term MYR volatility.
On the charts, OCBC cited bearish daily momentum for USD/MYR, pointing to support around 4.0540 to 4.0320 and resistance at 4.0810 and 4.0980. They also referenced that spot last closed around 4.0730, with “two way risks” likely as traders digest the next political catalyst.