Does the Pause in USD Strength Imply Stronger Equities?

As the U.S. Dollar takes a breather from its surge upward since the middle of last year…
image
image
And our diffusion index of purchasing power parities versus 18 other currencies hovers in neutral territory…
image
While individual PPP trends shift ever so slightly…
Europe
image
image
image
Asia
image
image
image
North America
image
Correlation with the USD has been the single most important factor in equity performance throughout the world over the last month:
image
If the relative importance of the correlation to the USD persists, this has noteworthy implications for various regions around the world.  North American equities, which tend to outperform during periods of USD strength, have languished in the face of a weaker dollar.  Meanwhile, Europe and EMEA–with the strongest negative correlations to USD performance– could benefit from a pullback or further consolidation.
North America
image
Europe
image
Pacific
image
Latin America
image
EMEA
image
EM Asia
image
Print Friendly, PDF & Email