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US Dollar Remains Closely Correlated With Stock Performance

Forex price action has fallen in with stock performance in recent days. Indeed, DailyFX Currency Strategist Terri Belkas noted in the latest Forex Weekly Forecast that the greenback ended last week sharply lower while traditionally risky assets (high-yielding currencies, stocks, commodities) all registered impressive gains. A similar pattern was noted at the weekly trading open yesterday. We now see the EURUSD exchange rate showing a whopping 91% correlation with world stock performance (as measured by the MSCI index), suggesting this inter-market dynamic remains in effect to guide USD-based pairs in the near term.

MSCI World Stock Index vs EURUSD Spot

Source: Bloomberg