Change in Gold-Dollar Correlation

We recently warned of the potential for changing correlations, no sooner was the ink dry than we noticed a a big one concerning gold and the US dollar index…

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And the week isn’t even over yet ...

The FOMC did nothing yesterday, as expected.

The markets were crazy early on ... and then again following the meeting. (A whole lot of jockeying, as Jack likes to say.)

The US dollar was the overall loser on the day; the standout winner seemed to be the euro.

In the last hour of trading yesterday the S&P 500 wiped away much of the day’s gains; futures are relatively flat as the morning gets going here in the US.

Who leads and who follows…

I recently downloaded Caesar’s Confessions on to my I-pod so I could listen while doing my strenuous exercise, which consists of a walk around the neighborhood once the US session is finished. Its great stuff, though not exactly easy listening. It’s more like homework. But the depth of the logic and insight into human nature that Caesar display’s is astounding, not to mention his diction and overall writing skills.

Glenn Stevens says no more carry-trade, for now ...

The profit-taking may have already begun after seeing the US dollar muster up strength here and there over the last couple days. But either way, RBA governor Glenn Stevens and his boys are seeing that the profit taking lasts a little bit longer.

It was just announced that the Reserve Bank of Australia will hike rates for a second consecutive month. But they took away the certainty of a similar decision in December. The problem: the market already baked that December rate hike into the cake ... which explains why the Australian dollar is down nearly 100 PIPs as I throw this together.