Inverse US Dollar and Stocks; Who’s Telling Lies?

The inverse of the US dollar has faded US and global stock markets.

The correlation between inverse US dollar and stock markets is not always in place, but it has been in place much more often than not in recent years. However, beginning in February inverse USD has declined while US (SPX) and global, ex-US (ACWX) have robotically kept climbing.

An interpretation, assuming the correlation is not broken in a long-term way, is that either stocks are positively diverging inverse USD (implying a coming decline in USD) or inverse USD is negatively diverging stocks (implying a coming decline in stocks).

Of course, another interpretation is that the correlation ended and market signals have mutated. I see the potential for that second scenario in another recent correlation, USD and bond yields, which will occupy another post.

For “best of breed” top down analysis of all major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed market updates and NFTRH+ dynamic updates and chart/trade setup ideas. Subscribe by Credit Card or PayPal using a link on the right sidebar (if using a mobile device you may need to scroll down) or see all options and more info. Keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar. Follow via Twitter@NFTRHgt.

********