Connect with us
Financial Press
the-tell:-the-‘dollar-smile’:-the-us.-currency-does-well-when-the-stock-market-either-jumps-or-slumps
the-tell:-the-‘dollar-smile’:-the-us.-currency-does-well-when-the-stock-market-either-jumps-or-slumps

Breaking

The Tell: The ‘dollar smile’: The U.S. currency does well when the stock market either jumps or slumps

The Tell


A happy currency?


federico parra/Agence France-Presse/Getty Images

Analysts at HSBC tested what’s called the “dollar smile theory” on this year’s manic move in markets. What HSBC found was that the dollar rose both on days the S&P 500 fell sharply, and on days it posted big jumps.

“What we do find is the dollar smile is not just a theoretical concept but does indeed work in practice,” said analysts Daragh Maher and Dominic Bunning.

Measured using the DXY
DXY,
+0.37%

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

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

The dollar is also sensitive to big S&P 500 rallies. The dollar rose 59% of the time when the S&P 500 rose at least 2%.

Written By

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Breaking

FA Center Published: Sept. 23, 2020 at 12:29 p.m. ET To understand why small-caps stumble at year-end, follow the Wall Street (bonus) money Getty...

Breaking

The Fed Published: Sept. 23, 2020 at 12:21 p.m. ET Boston Fed president concerned about second wave of COVID-19 Boston Fed President Eric Rosengren...

Breaking

Well, this is unfortunate… The story you requested could not be found. To find what you’re looking for, try one of these options. MarketWatch...

Breaking

While trying to buy a house this summer, I assumed our real estate options were limited to homes that were officially for sale. Well,...