What are these Bears talking about? These “Currency Bears” have been asleep of late, are they about to wake up?
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Two days ago the Power of the Patten shared that if history was a guide, the AUD$/US$ ratio was signaling that Commodities should be heading lower. (see post here) Is this part of the reason Gold and Silver are falling hard yesterday and today?
The above 4-pack reflects that at this time the Australian$/U.S.$ ratio is breaking support, as well as the Euro and the Franc. At the same time the U.S. Dollar is moving higher within its rising channel.
For the past few months, a Dollar rally and foreign currency decline has had little to no impact on Commodities and Stocks.
Currency correlations to risk assets have went to sleep and have had little to no impact on the markets since the stock lows of last fall! Are the Currency Bears about to wake up and cause historical correlations to creep back into the market? I humbly don’t know!
I do know this though… I will keep looking over my shoulder, respecting that the bears could get their acts together!
