26 June 2012 15: 00 GMT Ongoing European fiscal crisis continues to affect the Euro and the safe-haven US Dollar (ticker: USDOLLAR) could benefit if the weekend's European summit produces further tensions. The correlation between the Dow Jones Industrial Average and the Dow Jones FXCM Dollar Index underlines said point. Stock markets tend to fall on financial market uncertainty, and that same confusion most often leads to strength in the safe-haven US Dollar.
Forex correlation to broader financial markets continue to trade near record-strength, and we expect any major moves in the Dow Jones to force similarly wide swings in the Dollar Index and key USD-denominated currency pairs.
Forex Correlations SummaryView forex correlations to the American Gold ETF Trust (GLD), United States Oil Fund ETF (USO), American Dow Jones Industrial Average ETF Trust (DIA), UK FTSE 100 Index, and IShares Silver Trust ETF (SLV) prices.
Correlation between Dow Jones FXCM Dollar Index and Dow Jones Industrial Average
Dow Jones FXCM Dollar Index (lhs)
Reverse of Dow Jones Industrial Average (HHR)
The correlation between the Dow Jones Industrial Average and the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) now trades near year-to-date highs, underlining the US Dollar's sensitivity to movements in broader financial markets.
Sharp sell-offs in the Dow Jones Industrial Average and similarly risky assets have coincided with sharp jumps in the US Dollar. Price action emphasizes that the US currency remains an important source of safety in times of market turmoil pronounced. Given clear market indecision ahead of a key European summit at the weekend and ongoing European financial crisis, we believe that the USDOLLAR stands to benefit on any ensuing financial market stress.
We'll continue to watch for any important moves in the Dow Jones Industrial Average and broader markets. Indeed, earlier correlation studies emphasize that cross-market links remain as strong as ever on clear European market stresses.
Forex correlation to broader financial markets continue to trade near record-strength, and we expect any major moves in the Dow Jones to force similarly wide swings in the Dollar Index and key USD-denominated currency pairs.
Forex Correlations SummaryView forex correlations to the American Gold ETF Trust (GLD), United States Oil Fund ETF (USO), American Dow Jones Industrial Average ETF Trust (DIA), UK FTSE 100 Index, and IShares Silver Trust ETF (SLV) prices.
Correlation between Dow Jones FXCM Dollar Index and Dow Jones Industrial Average
Dow Jones FXCM Dollar Index (lhs)Reverse of Dow Jones Industrial Average (HHR)
The correlation between the Dow Jones Industrial Average and the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) now trades near year-to-date highs, underlining the US Dollar's sensitivity to movements in broader financial markets.
Sharp sell-offs in the Dow Jones Industrial Average and similarly risky assets have coincided with sharp jumps in the US Dollar. Price action emphasizes that the US currency remains an important source of safety in times of market turmoil pronounced. Given clear market indecision ahead of a key European summit at the weekend and ongoing European financial crisis, we believe that the USDOLLAR stands to benefit on any ensuing financial market stress.
We'll continue to watch for any important moves in the Dow Jones Industrial Average and broader markets. Indeed, earlier correlation studies emphasize that cross-market links remain as strong as ever on clear European market stresses.
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