I have been keeping track of all commodities, stocks and currencies for a while and I have noticed a strange correlation that I'm unable to explain to myself. Every time the stocks go up, there seems to be a weakening dollar move against most major foreign currencies (mostly noticing EURO, GBP, and CAD).
There was a slight move up this morning (around the time or posting) for the USD against others while the SPY dropped two dollars from 402 to 400. A very insignificant change if you ask me but it still baffles me how that correlation exists caused by even the smallest movements on the indexes… Could that possibly be algorithmic behaviour? Still, I can't get the reason behind it.
Now when the FEDs actually hike the interest rates, I can understand the movements between the currencies… But how come the stocks get to have that effect as well? How long has this been happening for? And what are the reasons?
Thank you for enlightening me.
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