Tuesday, April 20, 2010

Euro and ES Running Opposite

In general if the USD goes up,it is more costly to own American stocks, so they have had a pretty strong inverse correlation for much of the last few years. The US dollar index is like 40% comprised of the Euro, the biggest component by far.

Thus the Euro / USD pair and the US equities tend to move the same direction. But not always, as today. Something to keep an eye on as gaming of the market gets stronger.

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Insightful and Useful Comment!