DailyFX | July 24 2012 11:00 EDT A record-strength correlation between the Australian Dollar and S&P 500 Volatility Index (VIX) suggests that the recent VIX breakout could point to a significant AUDUSD top. The correlation between the S&P 500 Volatility Index (VIX) and AUDUSD has nearly never been stronger, and a potentially significant breakout in the VIX gives us a bearish AUDUSD bias. The so-called ‘Fear Index’ rises when investors fear major moves in US stock markets and turbulence across broader financial markets. Sharp concerns can high-yielding Australian Dollar against the safe-haven US Dollar (ticker: USDOLLAR). The correlation between the VIX and USDOLLAR trades near record-strength. We expect that the S&P 500 Volatility Index (VIX) may continue to guide the Australian Dollar and USDOLLAR through near-term trading. Forex Correlations SummaryView forex correlations to the Dow Jones Industrial Average, Crude Oil Futures prices, US S&P 500 Volatility Index, UK FTSE 100, and Spot Gold prices.

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