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Emerging Asian stocks are hitting new highs, led by Taiwan and South Korea, as AI-driven demand continues to dominate markets. However, currencies are weakening due to a stronger US dollar and uncertainty around the US-Iran peace deal. AI is now the strongest force in markets strong enough to offset geopolitics and rising rates. What’s Really Happening Equity markets and currencies are telling two very different stories: Stocks are rallying → driven by AI and semiconductor demand Currencies are weakening → pressured by USD strength and geopolitical uncertainty Taiwan and South Korea heavily exposed to semiconductors are leading gains because they sit at the center of the global AI supply chain. At the same time, unclear progress on the Iran deal and a stronger dollar are limiting capital flows into regional currencies. Why This Matters This divergence reveals something deeper: Equity investors are focused on  growth (AI) Currency markets are focused on  risk (USD + geopolitics...

The headline number isn’t the real story. The real story is policy strength. Key Insight A hawkish Fed normally strengthens the US dollar, but Singapore’s own policy tightening may be strong enough to keep the Singapore dollar appreciating anyway. What Investors Should Really Focus On The key lesson isn’t that SGD may reach 1.26. The key lesson is this: Singapore remains one of the few economies that still has room to tighten policy even in a highly uncertain global environment. Why This Matters For investors, this creates a very different positioning narrative: SGD remains one of Asia’s strongest currencies Singapore assets may continue attracting foreign capital Imported inflation should stay relatively contained SGD could outperform many regional currencies — even with a hawkish Fed Bigger Picture Most economies today are constrained: Growth risks are rising Inflation is easing unevenly Policy flexibility is limited Singapore stands out because it still has policy control and is act...

The Japanese yen stabilised after the  Bank of Japan (BOJ) kept interest rates unchanged , as markets balanced domestic policy signals against a  hawkish US Federal Reserve outlook  and rising global energy prices. Yen Steady Despite Policy Hold The yen strengthened slightly to around  ¥159.64 per US dollar , holding onto gains following the BOJ’s widely expected decision to  maintain its benchmark rate . However, currency movements remain volatile as investors weigh: Japan’s gradual policy normalisation path Continued strength in the  US dollar driven by higher US rates Oil Prices Add Pressure on Japan’s Inflation Japan faces increasing challenges from  surging oil prices , driven by escalating conflict in the Middle East. As a major  energy importer , higher crude prices are expected to: Lift inflation pressures Increase  import costs Complicate the BOJ’s policy decisions BOJ Still Seen on Path to Rate Hikes Despite holding rates, the BOJ i...

Summary UBS expects the  ringgit to strengthen towards 3.80 against the US dollar by December , potentially reaching its strongest level in more than a decade. The outlook is supported by  strong capital inflows, AI-driven investments, a resilient trade surplus, and narrowing US–Malaysia interest rate differentials . Key Points Ringgit target: 3.80 per US dollar by December , last seen in 2015 Best-performing major Asian currency in early 2026 , up over  3% YTD More than 10% gain in 2025 , extending its recovery trend What’s Driving the Ringgit Higher Sustained foreign inflows  from multi-year investments into  data centres and the digital economy Global tech and AI demand  expected to remain strong into 2026, supporting Malaysia’s  trade surplus Narrowing interest rate gap  as the  US is expected to cut rates , while  Bank Negara Malaysia is likely to stay on hold This environment encourages  USD-to-ringgit conversions by corporate...

Key Takeaways The dollar’s 7% drop may mark the end of its pullback US growth and equity outperformance continue to support the greenback Capital flight fears and hedging pressures have faded Fed policy expectations remain stable despite political noise Strategists say further dollar weakness needs a new shock A strong US economy makes sustained dollar depreciation difficult The long-anticipated  US dollar downturn is losing momentum , raising doubts over whether last year’s decline marked the start of a lasting trend — or simply a pause in a powerful multi-year rally. According to analysis by  Reuters , the dollar’s  7% fall last year now looks increasingly like the limit  of its pullback, despite political pressure and trade tensions reigniting hopes for a weaker greenback. As US President Donald Trump heads to the  World Economic Forum  in Davos, sentiment around the dollar has notably stabilised. Market fears of  foreign capital fleeing US assets n...

Key Takeaways: BNM reserves reached US$122.7B (Aug 29) , the highest in a decade. Enough to cover  4.8 months of imports  and  0.9x short-term external debt . Ringgit +6% YTD vs USD , supported by stronger reserves and improving sentiment. Reserves growth led by higher  foreign currency assets (US$109.1B) . Stronger Shield Against Shocks Bank Negara Malaysia (BNM) reported on Tuesday that the country’s foreign exchange reserves rose to  US$122.7 billion , a fresh 10-year high. The reserves expanded by about  US$700 million in two weeks , underscoring the central bank’s buffer against external volatility and capital outflows. The build-up comes alongside a firming ringgit, which has gained over  6% against the USD year-to-date , making it one of the better-performing Asian currencies this year. Healthy Import & Debt Coverage BNM highlighted that the reserves are sufficient to finance  4.8 months of imports  and cover  0.9x the nation’...

Global markets rallied overnight as President Trump delayed the implementation of reciprocal tariffs , providing time for negotiations.  Gold continued its 2025 rally , gaining  11% year-to-date  amid ongoing geopolitical uncertainties. 🌍 Global Market Recap 🔹  Dow Jones:  +0.77% 🔹  S&P 500:  +1.04% 🔹  Nasdaq:  +1.50% 📌  Nvidia (NVDA):  +3.16% after  HP Enterprise shipped its first Nvidia Blackwell AI system . Earnings set for  Feb 26 . 📌  US 10-Year Treasury Yield:   4.528% (-0.106)  after hitting 4.63% post-CPI data, with markets pricing in a  25-bps Fed rate cut by September . 📌  Gold (Barrick Gold - GOLD.US):   USD 2,958/oz (+11% YTD)  as investors seek  safe-haven assets amid geopolitical risks , including recent  Israel-Hamas ceasefire talks . 🇲🇾 Malaysia Market Overview 🔹  USD/MYR:  4.4555 (-155 pips) as the ringgit strengthened alongside regional ...

Japan's wholesale inflation accelerated for the fifth straight month in January, reaching 4.2% , further solidifying  market expectations for a Bank of Japan (BOJ) rate hike  in the near term. 📈 Key Inflation Figures & Market Impact 🔹  Wholesale inflation (CGPI) rose 4.2% y-o-y , exceeding the  4.0% market forecast  and up from  3.9% in December . 🔹  Prices rose across key sectors , including  food, textiles, plastics, and non-ferrous metals . 🔹  Yen-based import prices climbed 1.5% , reversing a 0.7% decline in December—highlighting the  yen's continued weakness . 📌  Why It Matters:  The BOJ is now under increased pressure to  raise interest rates further  to contain inflation. 💰 Market Reactions: Bond Yields & Currency Shifts 📌  The two-year Japanese government bond (JGB) yield surged to 0.805% , its highest level since  October 2008 . 📌  The yen weakened sharply , with the  dolla...

Global stocks surged on optimism over a possible Ukraine-Russia peace deal , while  bond markets sold off as US inflation fears dampened hopes for Fed rate cuts . Meanwhile,  oil prices slid  and  gold remained near record highs as investors weighed the impact of geopolitical and economic uncertainties. 🌍 Stock Markets Gain on Peace Optimism 📈  US & European stock futures rallied  on renewed hopes that  US-led peace talks  could bring an end to the  Ukraine-Russia war . 📈  Asia-Pacific markets followed suit , with Japan’s  Nikkei up 1.1%  and  Hong Kong’s Hang Seng gaining 1% , hitting a  four-month high . 💬  Kyle Rodda (Capital.com):   "Optimism might be premature. Ukraine may struggle to accept concessions like giving up NATO ambitions and ceding territory." 💰 Inflation & Fed Rate Cut Hopes Fade 📌  US consumer prices rose by the most in nearly 1.5 years in January , with  core infla...

KUALA LUMPUR: Bank Negara Malaysia’s (BNM) international reserves fell RM8.3bil to RM356.4bil (US$94.5bil) over the past two weeks until Aug 14. BNM said on Thursday the international reserves as at Aug 14 was sufficient to finance 7.5 months of retained imports and it was 1.0 time the short-term external debt. The reserves had declined by RM8.3bil from the RM364.7bil (US$96.7bil) as at July 31, 2015. The reserves position then was sufficient to finance 7.6 months of retained imports and was 1.1 times the short-term external debt. The above news was taken from Bank Negara reserves decline to RM356B from The Star. The bad news is the reserves are still dropping, but at slower rate; although the Malaysian Ringgit continue to dive until 4.19 against the US Dollar before gaining back and close at 4.17 for the weekends. The slower rate of the reserves drop would most likely because there is no longer intervention by the Bank Negara against the Malaysian Ringgit devaluation ...

The Ringgit weakened against the USD and this trend seems to continue and show no sign of slowing down. USD against MYR currency A quick search on google will show you this and it's scary because the spike doesn't seem to slow down and there's no sign of it any time soon.  And to make matters worse, the BNM International Reserve as of July 2015 has shrunk below US$100 billion.  BNM International Reserves shrunk below US$100 billion To put into perspective, this is the first time that the reserve has fall below this level since August 2010.  The central bank gave a statement today and said the reserves' position is sufficient to finance 7.6 months of retained imports and is 1.1 times the short-term external debt.  The concern on the Ringgit currency is real as it has depreciated for 8 consecutive days.  The local currency slipped further today to 3.9265 against the US dollar — the lowest level in 17 years — compared with Thursday...

Currency exchange rate is also one something that we should always look up on to gauge whether import goods from certain countries is getting cheaper or getting more expensive. Another reason for monitoring the currency exchange rate is so that we can know whether the economy in a country is getting better or worse, although nowadays currency exchange rate has slowly become speculative rather than fundamental. As Malaysian, I am always curious how the country currency perform against some major nations like the United States. Malaysian Ringgit Exchange Rate Currency Exchange Rate