USD Correlations vs. Gold, Crude and 10yr
The negative correlation between Gold and the USD Index has notably risen over the past several trading sessions and currently shows a 93% negative correlation on a normalized basis over the past month. The currently elevated negative correlation rate appears to have topped out in the near term, which may lead to a minor breakdown in the relationship in the near term. The negative correlation between Gold and USD fell to an intra-month low at 78% on July 8.
The negative correlation between USD and Crude has been less pronounced and has declined noticeably over the past several days, standing now at 19% on a normalized basis over the month — down from a monthly high of 62% on July 15. If Crude continues the current sell-off, this relationship will continue to be loose at best.
The relationship between USD and the 10yr, currently around 80%, has been solid over the past 2 weeks — a clear indication of how rates have driven up the value of the greenback. Inflation, bond yields and rate outlooks continue to be the main driving force behind USD.