Currencies Advancing Against the Dollar as Fears Ease

The dollar-bloc is leading the move against the dollar. The easing of some anxiety around Japan's nuclear crisis and firmer commodity and equity prices are helping to lift the Canadian dollar and antipodean currencies.

We had noted recently that the Canadian dollar's correlation with oil prices and the S&P 500 (SPY) had broken down. The Canadian dollar's correlation with the price of oil had actually become inverted in the first half of March, but now has swung back to slightly positive (r2= 0.11). The recent peak was around Xmas (r2=0.76).