Currency and Commodity: Ringgit Weak? Oil and Coal Declines

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The Dollar continues to gain in strength, while the Ringgit is still pooh-pooh.

Another strong month for the U.S. Dollar. This is the third consecutive month that the dollar has gained. Well, it is good news for people holding U.S. investments, but the strength of the dollar might not be good. You see, when investors get scared (which is happening now), the dollar has always been viewed as safe. 59% of global exchange reserves are in U.S. Dollars.

From the Malaysian front, the Ringgit continues to decline for the month despite the gains from its stock market. it just goes to show that developments outside of Asia are now driving many Asian stock markets and currencies performances.

For you: Dollar strength still appears strong at the moment, and with global recessionary risks increasing with the conflict between Israel and Palestine too, there doesn’t seem to be any factors that are driving the dollar index down for the rest of the year.

Geopolitical tensions rattle crude oil and coal markets

Not even OPEC could come to the rescue of crude oil prices this month. The escalation of conflict between Israel and Palestine have pushed most commodity markets into the red this month. The fear now is that the conflict could catalyze a more severe global recession.

In the coal markets, despite China’s stronger-than-expected GDP growth for 3Q 2023, prices still came down for the month. Seems like the coal market is still dependent on China’s economy. It is the world’s biggest coal consumer.

For you: Certainly, the Israel-Palestine conflict is dampening prices of most commodities down, but investors would have to watch out for OPEC’s oil decisions that could boost prices back up.