Joined Feb 2021
Status: Junior Member
USD: Dollar correlations with other stalling asset groups!!!
The trade-weighted dollar is up from its lows in early January by just over 2 percent. The declining indirect correlation of the dollar with stock markets is noticeable and it's difficult to place a finger on what drives this. True, US yields have picked up marginally, but last week's increase in German Bund yields matched that folks Treasuries. And, of course, the US vaccine roll-out looks much more promising than in Europe, while year-to-date returns within the US S&P 500 are just slightly above those of the Eurostoxx 50. Here, heavy short dollar positioning is probably going to play a serious role and would again seem vulnerable if any portion of the utilization data for non-farm payrolls were welcomed positively. After the 140k decline in December, Consensus is trying to find around a 100k gain. Any upside surprise might see DXY extend its rally at 91.88 to the 100-day moving average, but we still like better to see this as a rally for the market.