The weak dollar-strong stocks trade that has dominated markets for the past three years has been breaking down, providing hopes that greenback gains don't have to be a bad thing for equity investors.
Though the dollar still trades at relatively low levels against the world's currencies, it has been on a steady trajectory higher since hitting its low of July 2011.
The surge has come as fears have intensified over the effect the European sovereign debt crisis is having on the global economy.
But rather than drag U.S. stocks down, as a stronger dollar had done since the depths of the 2008 financial crisis, the move has coincided with a general though volatile levitation of the equity markets.
"The direction of the dollar and the direction of the market seem to be overall in sync at this point, and it's been a process that started just about 12 months ago," says John Stoltzfus, chief market strategist at Oppenheimer in New York. "A lot of this correlation that is occurring is really related in part at least to the fact that the U.S. is being considered by global equity investors as the place to be right now as the more relatively stable economy compared to Europe or the emerging markets."Page 1 of 4 | Next Page