Economists at Scotiabank analyze the correlation between the US Dollar Index, the VIX and the S&P 500 Index. They conclude that the key support at 3915 for the S&P 500 is set to determine the USD trend.

Negative correlation between the USD and the S&P 500

“Our correlation screen reflects tightening positive correlations between the DXY and the VIX (+55% on a rolling 1-month study of daily returns) on the one hand and a stronger, negative correlation between the USD and the S&P 500 (-64%) on the other.”

“Stocks are just about holding the uptrend from the Jun low on the daily chart – I spot (rising trend line) support at around 3915 for the S&P 500 currently and whether this level holds or not will go a long way to shaping USD trends into and beyond the FOMC.”