Tight inverse correlation between movements in the U.S. dollar and various other asset classes seems to be back on again after loosening up a bit last week. G-20 meeting signals no let-up in central banks’ efforts to stimulate the global economy. U.S. dollar index is getting hammered, and in turn oil, gold and US stock futures are all seeing strong bids. Dollar index down almost 1%....MOREFrom Charts and Coffee:
My script from last night predicts a move up tied to the dollar putting in a short term bottom and a pullback tied to the dollar consolidating and bouncing off support.
This morning, we’re seeing another big selloff of the Dollar. This is not a surprise. As I mentioned last week, the Fed gave traders the green light to slam the Dollar last week.
The correlation of a weak dollar is in play again this morning. UUP is down 1.23% in the pre-market. EURUSD is threatening a breakout over $1.50. Expect commodities to do well today if the Dollar selloff holds. GLD is up another 1.33% in the pre-market....I’m watching to see if the indexes can manage to breakout before the dollar finds support. I’m thinking traders see the support on the Dollar chart which should limit bullish euphoria and contain the markets. We’ll see.