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Dec 3 2019

Down jones index

(Last Updated On: 28/11/2019)




Down jones index-Down jones index
Down jones index-The Dow Jones FXCM Dollar index (ticker: USDOLLAR) and Australian Dollar trade near record correlation with the Dow Jones Industrial Average, offering attractive proxies for bets on the US stock ma…

Dollar Index Correlation to Dow Jones Suggests bottom May Be in Place

Australian Dollar trade near record correlation with the Dow Jones Industrial Average, offering attractive proxies for bets on the US stock market.

The Dow Jones Industrial Average correlation to the DJ FXCM Dollar Index has almost literally never been stronger, and the strong link emphasizes that financial markets are likely to move in tandem amidst strong market tensions. Indeed, the Dow’s next moves could prove pivotal in setting direction for the Greenback as the Dollar Index trades near record lows.

According to our Senior Technical Strategist, the DJ FXCM Dollar Index stands to rally sharply off of recent lows. If cross-market correlations hold, this could in fact call for a turn lower in the Dow Jones Industrial Average itself.

Forex Correlations Summary

Forex correlations against Oil, Gold, and the Dow Jones Industrial Average for the past 30 calendar days:

Read a guide on understanding the forex correlations summary chart .

Dow Jones FXCM Dollar Index and the Dow Jones Industrial Average

The US Dollar’s (ticker: USDOLLAR ) link to the Dow Jones Industrial Average remains quite strong and trades near a record. The Dow itself has been intensely volatile as earlier tumbles have given way to a noteworthy reversal. All the while, the DJ FXCM Dollar Index has matched it on a virtual tick-for-tick basis.

The US Dollar remains a strong proxy for broader stock markets as one of the world’s foremost safe-haven currencies. It remains critical to watch the Dow’s next moves as the DJ FXCM Dollar Index continues to trade near record-lows. A sudden downturn in stocks could spark a much larger USD recovery—consistent with our Senior Technical Strategist’s calls for a significant US Dollar bounce .

Australian Dollar/US Dollar Pair versus Dow Jones Industrial Average

The Australian Dollar’s link to the Dow Jones Industrial Average likewise trades near record-strength, and the AUDUSD remains a speculator’s favorite as a proxy to stocks and commodity prices. At a 20-day correlation coefficient of 0.9, the variation in AUDUSD matches moves in the Dow with 81% “Goodness of Fit”.

The Australian Dollar likewise boasts the highest short-term interest rate of any G10 currency. This means that the AUDUSD serves as a higher-yielding alternative to the widely-followed stock market index itself. Thus if you believe that the DJIA is headed higher, the AUDUSD represents an attractive and more liquid alternative to straight bets on the Dow itself.

US Dollar/Canadian Dollar pair versus the Price of Crude Oil

The US Dollar/Canadian Dollar pair’s correlation to Crude Oil prices remains strong as the two have tracked each other fairly closely as of late. A sudden tumble in oil prices coincided with a sharp rally in the USDCAD, and their recent moves suggest we could continue to watch them move together.

If you have a strong view on Crude Oil prices, the USDCAD pair offers a highly-liquid proxy to bets on the actual futures contract. A continuation of recent financial market volatility threatens to force sharp moves across the board. Expect Crude oil prices and the USDCAD to continue to move opposite each other with good accuracy.

Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To join this author’s distribution list, send an e-mail with subject line “Distribution list” to drodriguez@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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Down jones index

SOURCE: https://www.dailyfx.com/forex/technical/article/forex_correlations/2011/08/16/dow_jones_us_dollar_index_correlation.html


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