Over the last couple of months FX
traders have become accustomed to a situation whereas the Dollar and
equity indices have traded in a negative correlation. Prior to the
month of March the Dollar index was classed as a safe haven, as
investors preferred the world’s currency compared to a risky stock
market. Many trends or counter trends where characterized by the same
type of situation;
As stocks rose, the Dollar lost its strength.
As stocks dropped the Dollar gained strength as a safe haven.
This
week the correlation between the two weakened significantly as stocks
pulled back but the Dollar failed to gain strength, dropping rapidly
against its counterparts. By taking a glance at the chart below one can
see the movements from last week’s session. As the major indices
corrected, so did the Dollar index.
*courtesy of netdania.com
Read the full article at dodjit.com
traders have become accustomed to a situation whereas the Dollar and
equity indices have traded in a negative correlation. Prior to the
month of March the Dollar index was classed as a safe haven, as
investors preferred the world’s currency compared to a risky stock
market. Many trends or counter trends where characterized by the same
type of situation;
As stocks rose, the Dollar lost its strength.
As stocks dropped the Dollar gained strength as a safe haven.
This
week the correlation between the two weakened significantly as stocks
pulled back but the Dollar failed to gain strength, dropping rapidly
against its counterparts. By taking a glance at the chart below one can
see the movements from last week’s session. As the major indices
corrected, so did the Dollar index.
*courtesy of netdania.com
Read the full article at dodjit.com
