Sterling Disturbing Correlation
Most traders are aware of the positive correlation between equity indices and high yielding currencies such as the AUD and NZD. But something else has come up as of late. GBPUSD has grown positively correlated with equities, especially US indices (DOW30 and SP500). I have already mentioned this in several tweets earlier this month, asking followers why GBPUSD outperforms EURUSD and USDJPY during rallying stocks and why it is among the big losers during risk-off. Said differently, EURGBP tends to rally as stocks decline and vice versa. Why has GBP become a risk-on trade? 1) The UK's swelling current account deficit of 5.7% of GDP and 2) the structural downside risks of Brexit imply it will be more challenging for the UK to draw necessary funds to finance the deficit, especially at a time when the currency has fallen to the mercy of soundbites by bankers mulling departing London, politicians discussing Hard Exit. The situation with high CA deficit currencies becomes worse when the central bank is easing (or not hiking), as was seen in the case of the USD in 2006-7.

More Hot-Charts
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USDJPY and EURUSD
Apr 22, 2026 11:57 | by Ashraf Laidiسأرسل رسالة صوتية و كتابية توضيحية لأعضاء مجموعة الواتساب الخاصة حول هذه المخططات - Will send detailed note on latest parameters to our WhatsApp Bdcst Group... -
US crude oil Update
Apr 17, 2026 16:02 | by Ashraf Laidiسأرسل رسالة صوتية و كتابية توضيحية لأعضاء مجموعة الواتساب الخاصة حول هذه المخططات - Will send detailed note on latest parameters to our WhatsApp Bdcst Group... -
Patterns on Fridays & Mondays
Mar 30, 2026 14:38 | by Ashraf LaidiSince the start of the war on Iran, the pattern of falling Fridays in US equity indices has become obvious. Will the pattern ends this week.




