Interesting Correlations For RM & Yuan

Looking at the annual correlations of the Ringgit, it is interesting to note that in the recent past five years (2006-2010), the Ringgit's correlation with the Sing $ has risen with the R Square at 93% compared to 47% over the longer 10-yr period (2000-2010). The Ringgit is also more correlated to the Thai baht in recent years with an R Sq of 74%. What is even more interesting is that the Chinese Yuan has an 89% R Sq with the Indonesian Rupiah and a 74% R Sq with the Aussie $ over the 2006-2010 period, suggesting that China's Yuan appreciation is in line with its increasing economic growth and consequent rising demand for regional commodities. To verify the latter linkage, we may need to investigate further to see whether China's commodity imports from these two nations have caused the Rupiah and the A$ to appreciate.  Table 1. Currencies with Highest Correlation to Ringgit
10 years (2000-2010)	R Squared	5 years (2006-2010)	R Squared
Thai Baht	59%	Singapore $	93%
Phil. Peso	48%	Thai Baht	74%
Singapore $	47%	Phil. Peso	58%
Indian Rupee	39%	Indian Rupee	58%
Table 2. Currencies with Higest Correlation to Renminbi
10 years (2000-2010)	R Squared	5 years (2006-2010)	R Squared
Korean Won	25%	Indon Rupiah	89%
Japanese Yen	22%	Australia $	60%
Phil. Peso	13%	Korean Won	51%
Singapore $	10%	Japanese Yen	46%