Polar Opposites: Equities vs. US Dollar

While the inverse relationship between the dollar and stocks is well documented, the recent intraday movements of the two assets takes it to another level. The chart below shows the intraday chart of the S&P 500 over the last two days compared to the US Dollar Index on an inverse scale. In other words, a rising red line indicates dollar weakness while a falling red line indicates dollar strength.

As shown in the chart, since the Fed's rate announcement yesterday, the dollar's strength has been in exact lockstep with the weakness in equities. Over the last two trading days, the S&P 500's correlation to the US dollar index has been -0.97. You can't get much more negatively correlated than that!

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