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Currency Index Correlations

  • #1
  • First Post: May 25, 2011 9:47pm May 25, 2011 9:47pm
Hello, may I know why the AUDUSD chart same as AUD index chart, GBPUSD chart same as GBP index chart, EURUSD chart same as EUR index chart, INVERTED USDCAD chart same as CAD index chart, INVERTED USDJPY chart same as JPY index chart?
  • #2
  • May 25, 2011 9:53pm May 25, 2011 9:53pm
because they are all measured against the USD.

the 6 majors are all vs the USD
the crosses are USD/X VS USD/Y = X/Y
the only official quoted currency not measured vs the USD is the eur/jpy
AVT INVENIAM VIAM AVT FACIAM
  • #3
  • May 25, 2011 10:48pm May 25, 2011 10:48pm
Quoting the redlion
because they are all measured against the USD.

the 6 majors are all vs the USD
the crosses are USD/X VS USD/Y = X/Y
the only official quoted currency not measured vs the USD is the eur/jpy
Sorry I don't understand this part: "the only official quoted currency not measured vs the USD is the eur/jpy" Could you please explain?
But USD index is unique?
  • #4
  • May 25, 2011 11:12pm May 25, 2011 11:12pm
The USD is the reserve currency so all 6 majors are measured against it

the only OFFICIAL pair (not simply a cross) USD/X VS USD/Y = X/Y
is the EUR/JPY.

EUR/JPY is measured independently from the USD.

all other currencies not involving USD are measured in their relative strength against the USD vs relative strength against the usd.

i cant explain it any other way

do a search, go to wiki, or any other source and type in forex market structure or forex.
it will give you the structure of the market the players and how currencies are quoted
AVT INVENIAM VIAM AVT FACIAM
  • #5
  • May 25, 2011 11:16pm May 25, 2011 11:16pm
Quoting the redlion
The USD is the reserve currency so all 6 majors are measured against it

the only OFFICIAL pair (not simply a cross) USD/X VS USD/Y = X/Y
is the EUR/JPY.

EUR/JPY is measured independently from the USD.

all other currencies not involving USD are measured in their relative strength against the USD vs relative strength against the usd.

i cant explain it any other way

do a search, go to wiki, or any other source and type in forex market structure or forex.
it will give you the structure of the market the players and how currencies are quoted...
ok Thanks
  • #6
  • May 26, 2011 1:30am May 26, 2011 1:30am
Non-US dollar currency indices shouldn't move in lockstep with their denomination in dollars. However, high correlation is expected, as the dollar generally receives the largest weight in constructing the index.

If you want us to have a look at the specific charts you're talking about, please post your sources.
The nail that sticks out gets hammered back in
  • #7
  • Last Post: May 26, 2011 1:39am May 26, 2011 1:39am
Quoting Noloqy
Non-US dollar currency indices shouldn't move in lockstep with their denomination in dollars. However, high correlation is expected, as the dollar generally receives the largest weight in constructing the index.

If you want us to have a look at the specific charts you're talking about, please post your sources.
The charts I mentioned is Broco mt4

http://www.brocompany.com/trading-pl.../broco-trader/
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