Forex: Risk Trends Mixed with Dollar Down, Equities Up
We have come to take cross-market correlations for advantage. We expect 'risk trends' to put stock, forex, fixed income and commodity markets on the same trend; but that relationship requires a clear driver. This morning, volatility has increased while the expected trends have diverged. The Dow Jones and S&P 500 Indexes are sharply lower overnight, while the US Dollar is struggling and lifting EURUSD back above 1.2825. How long will this divergence last and is there a clear read for traders in this contrast?