I have written about the non correlation between the US Dollar Index and stocks several times including most recently here US Dollar and Stocks. Another words when the dollar index was appreciating higher in value, stocks were falling at the same time. This non correlation was extremely strong up to around September of 2011. Let's have a look at a 4 month chart of the US Dollar Index and the S&P 500 with performance since this time.
Notice that both the S&P 500 is higher by 9.62% and at the same time the US Dollar Index is higher by 8.27%. So the question becomes, has the non correlation been broken? For the time being yes. Part of this reason could be due to economic releases that have been better than expected over this past month, or that investment dollars are finding their way out of Europe and into US stocks while the dollar gains strength against the Euro currency. Thank you for stopping by.
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