The recent dollar strength met a continuation of the risk asset rally that started since November. The last two months of last year saw our measure of the greenback drop to near YTD lows
RDDXY declined by 4.2% in both November and December trading, these were the worst months seen in a year
Historically, USD and risk correlations have been negative, a short-term coefficient ticked at around 60% at the end of 2023
We’re now looking at a break-up of the historical relationship as the dollar reverses the November/December losses and equities rise to record highs
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