Nisarg Sutaria's  Instablog

Friends, Thank you for your support. I am stopping this Blog for One Year. I need to gain knowledge about stock markets, economics and finance as my background is in Manufacturing Engineering field.

Correlation of USD and S&P 500 with GBP

We can see from the chart that FTSE correlates S&P 500 as per previous post. That means USA Economy and UK Economy are in correlation.

I am sorry to say that I could not find the charts for comparison for CAC and DAX with EURO and as well as charts of Nikkei and Yen on Yahoo Finance.

Disclaimers: This information is provided for educational purposes only. It may not apply to your personal financial situation. Before investing, you may want to discuss your plan with an investment advisor or financial planner. Investments in ETF's and in mutual funds are not FDIC insured and can cause loss of principal. (You can lose money).

Disclosure: No positions at the time of writing.

Correlation of USD and S&P 500 with EURO If we examine since January 2005 - US Dollar to EURO Rate declined and stock market boomed till mid-2008. At the time of beginning of recession in end 2008 - first quarter 2009 USD strengthened compared to earlier and S&P 500 nose dived. USA saw flood of money going out of their economy. After fiscal stimulus packages economy revived USD again became weaker and S&P 500 still in negative territory for returns are concerned but better than before.
Correlation of USD and S&P 500 with GBP If we examine since January 2005 - US Dollar to GBP Rate declined till third quarter 2008 except for end 2007 and first quarter of 2006 and stock market boomed till mid-2008. At the time of beginning of recession in end 2008 - January 2009 USD strengthened compared to earlier and S&P 500 nose dived. USA saw flood of money going out of their economy. After fiscal stimulus packages economy revived USD became weaker than earlier but better than first quarter 2005 returns are concerned and S&P 500 still in negative territory for returns are concerned but better than first quarter of 2009.
Correlation of USD and S&P 500 with YEN If we examine since January 2005 - US Dollar to YEN increased till last quarter 2007 and stock market boomed till mid-2008. At the time of beginning of recession in end 2008 - first quarter 2009 YEN strengthened compared to earlier and S&P 500 nose dived. USA saw flood of money going out of their economy. After fiscal stimulus packages economy revived USD could not regain strength fully and S&P 500 still in negative territory for returns are concerned but better than before. This might have been caused due to YEN Carry trade as YEN would have strengthened because people would have offloaded foreign currency in the Japanese market as USA and Europe markets were weak. If you see the chart you can easily visualize that for year 2008 as USD compared to YEN and S&P 500 both got weaker compared to year 2005.

If you check the graph you can see that in the end of 2008 USD strenghtened. That was because all world markets were in turmoil and people thought that USA is a stable country politically as well as economically so there was flood from all over the world to buy USD.

Disclaimers:  This information is provided for educational purposes only. It may not apply to your personal financial situation. Before investing, you may want to discuss your plan with an investment advisor or financial planner. Investments in ETF's and in mutual funds are not FDIC insured and can cause loss of principal. (You can lose money).

Disclosure: No positions at the time of writing.