Equity markets and FX: what's the link doing right now?

Equities and currencies correlate through risk appetite and rate expectations — but the correlation breaks when the stories diverge. The current link is worth mapping.

Equity markets and FX: what's the link doing right now? — currency correlation diagram
Two currency pairs moving in and out of correlation

What are you seeing?

  • how equity moves are reaching your pairs
  • the regime where the link breaks
  • the index you watch as a currency signal
Equity markets and FX: what's the link doing right now? — risk-reward diagram
A risk-reward ratio of 1 to 2

Background: risk-on risk-off explained.

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