The USD and MYR do not make a major pair together, despite the fact that the USD is indeed the king of majors. The Malaysian Ringgit on the other hand is not even close to being a major.
The United States Dollar is the top currency in the world, backed by one of the world’s biggest, most powerful and diverse economies. One of the more interesting facts about the greenback is that more of it is held outside the US than within.
Some countries use it as their national currency officially, while others do so de-facto.
The defining traits of the US economy are:
– a mixed capitalist nature
– high productivity
– excellent infrastructure
– plentiful natural resources
Most of the oil traded around the world is bought and sold in USD. For that reason, some call the greenback “petro dollar”.
The GDP of the United States makes up some 23% of the global GDP. The GDP of the EU surpasses that of the US in purchasing power parity however. The overwhelming majority of FX trading takes place in USD too.
The Malaysian Ringgit is the representative of a very different kind of economy. The economy of Malaysia has only recently transitioned from an agricultural/commodity based model to an economy relying mostly on services and manufacturing.
Even so, it has not been immune to the various crises that shook the global economy in the last couple of decades.
What’s interesting about the MYR is that its roots are in a way shared with the USD. Both currencies have at one point had some kind of connection to the Spanish Dollar.
Both the US and Malaysia had used the Spanish Dollar as legal tender at one point or another. In Malaysia’s case, the Spanish Silver Dollar had two runs as the official currency of the country.
Introduced in 1975, the Ringgit has been rather stable, although over time it has yielded ground to the USD, in spite of the inflation that the latter went through.
Informally, the Ringgit is also known as the Malaysian Dollar.
While the economy of Malaysia is now services and manufacturing-driven, commodities still play a major role in it. The country is a major exporter of liquefied natural gas (LNG) and crude oil.
Slumping oil prices have exacted a major toll on the strength of the Ringgit against the USD.
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