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Recently, we have seen some types of correlations hold between currencies and equity (stock) markets. You should take note that risk sentiment is driving the market right now. This means that depending on how confident investors, they will either pick riskier assets or safer assets. Because of all the financial turmoil that the recession has caused, many traders have decided to unwind their positions in riskier assets (such as stocks) in favor of the dollar. Remember, the dollar is considered a 'safe-haven', primarily because it is considered the world's reserve currency. Now, when traders have become more confident about global recovery, they build their positions in stocks and other higher yielding currencies. Just remember that this has been true as of late, and hasn't always been this way. As people always say, the markets are always changing, and what is true today might not be true tomorrow. The important thing is to be able to stay on top of the market and judge what is the dominating theme.
