Weaker Equity Markets Could Ignite U.S. Dollar Rally

Since Forex traders seem to be ignoring economic reports at this time, the key indicator will be the equity markets.

Since Forex traders seem to be ignoring economic reports at this time, the key indicator will be the equity markets. Weaker stock markets will trigger risk aversion which will lead to a stronger Dollar.

Until we see the start of a sharp correction in the equity markets that professional investors have been waiting for, continue to look for the Dollar to weaken.

Today’s late reversal to the downside in the U.S. equity markets could lead to follow-through selling tomorrow. Watch the overnight action to see if investors are becoming more risk averse.