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The correlation is rock solid !
Weak ? Huh ?
----- Original Message -----
From: "Gitanshu Buch" <OnWingsOfEagles@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, July 16, 2000 6:55 AM
Subject: [RT] MKT: Exchange Rates, Equity Market Correlations
>
> For currency/equity traders:
>
> Those looking at the Dollar Index for stock market direction may find the
> study's other findings interesting.
>
> Just finished reading the Bank of International Settlements' Annual Report
> released in mid-June.
>
> Found, on Section V, "Foreign Exchange Market Developments" under "Stock
> Market & Exchange Rates", page 90-92. the summary of research covering 25
> years' correlation of price moves between, well, stock markets and foreign
> currencies for US, Japan and Germany... this conclusion:
>
> "Overall, these results suggest that the relationship between exchange
rate
> movements and stock market returns is weak. The movements of the major
> bilateral exchange rates do not appear to be influenced to any significant
> extent
> by the performance (be it absolute or relative) of the US, Japanese and
> German stock markets. Moreover, the time pattern of these correlations
does
> not support the conclusion that they were broadly driven by key
> macro-economic
> fundamentals, such as the cyclical performance, or by the relative
> monetary policy stance."
>
> Those interested may want to read it for themselves at
> http://www.bis.org/publ/ar2000e.htm
>
> Gitanshu
>
>
>
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