JP Morgan: USD regains positive correlation with US Equities

Livewire News

Livewire

JP Morgan: USD regains positive correlation with US Equities. Foreign exchange movements are difficult to predict, but are driven, amongst other factors, by interest rate and growth expectations, relative to other economies. The U.S. Dollar has increased 11% on a trade-weighted basis this year, supported by a pick-up in growth in the U.S. economy, and expectations of Fed rate hikes in 2015, in contrast with weaker growth and lower rate expectations elsewhere, especially in Europe and Japan. These forces have pushed the correlation between the U.S. Dollar and the S&P 500 into positive territory, meaning that at this stage of the cycle the predominant driver of dollar strength is not its safe haven but rather its growth characteristics. If the path of monetary policy and economic growth between U.S. and its trade partners continues to diverge, we can expect the U.S. dollar outperformance to continue.


Livewire News
Livewire News
Livewire

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment