In general, there’s a negative correlation of the US Dollar (DXY) with US equities (S&P 500 – SPX), suggesting that when the value of the US dollar increases, the S&P 500 tends to decrease, and vice versa.
The 1-year correlation coefficient between the U.S. Dollar Index (DXY) and the S&P 500 (SPX) is approximately -0.80.
In the comparative weekly chart below of the DXY versus SPX, we observe this general inverse relationship unfolding over time:
Both the US Dollar and S&P 500 are currently near key levels:
- The Dollar approaching previous highs of October 2023 (107.348)
- The SPX currently trading around the round $6,000 “psychological” trading number.
US Dollar – DXY:
Therefore, it is crucial to closely monitor the US Dollar (DXY).
A continued upward movement in the DXY could further exert pressure on US equities, whereas a retreat from current levels would likely support and enhance the bullish momentum in US equities moving forward.
The good news is, there are still opportunities all over the market… even if equities are being pushed down. That’s what we use Market Rover for.
Click HERE to get Market Rover and find the opportunities, even if stocks are not rising!
Happy Trading!
