The Inform: The ‘greenback smile’: The U.S. foreign money does properly when the inventory market both jumps or slumps

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A contented foreign money?


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Analysts at HSBC examined what’s referred to as the “greenback smile concept” on this yr’s manic transfer in markets. What HSBC discovered was that the greenback rose each on days the S&P 500 fell sharply, and on days it posted large jumps.

“What we do discover is the greenback smile isn’t just a theoretical idea however does certainly work in follow,” mentioned analysts Daragh Maher and Dominic Bunning.

Measured utilizing the DXY
DXY,
+0.38%

greenback index, the analysts mentioned the greenback rose 51% on days when the S&P 500
SPX,
-0.81%

fell greater than 0.5%. The greenback rose 57% on days the S&P 500 fell greater than 1.5%.

The greenback can also be delicate to large S&P 500 rallies. The greenback rose 59% of the time when the S&P 500 rose no less than 2%.

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