Issue 1 · Late October 2026
The US dollar, the yen, the euro, the renminbi and the Taiwan dollar. Each number compares the indicator only with its own past: the share of past months it is higher than; 50 is normal. For prices and rates, what is compared is how far the reading is from its own 10-year average: 100 means the furthest from that average, not necessarily a record price or rate.
This issue
The others: USD/TWD 76 (warm), EUR/USD 73 (warm), US dollar 45 (neutral) and USD/CNY 31 (cool).
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
Where it stands now
Not combined
These are not combined into one number because a bigger number means different things: for the yen, renminbi and Taiwan dollar, a bigger number means that currency is weaker (one dollar buys more of it); for the euro, a bigger number means the euro is stronger. Added together they would mean nothing, so each exchange rate gets its own chart.
What it is linked to
US dollartoEmerging marketsCommon explanation: Ripple · opposite direction
A strong dollar makes emerging economies’ dollar debts heavier, drives money out and tightens financial conditions
This issue: US dollar at 45 (neutral), Emerging markets at 53 (neutral) — at least one is in the neutral range (40–60), so we make no call this issue.
Supported by the dataAgreement +0.56 · in step in 5 of 5 5-year periods
US dollartoCommoditiesCommon explanation: Cause · opposite direction
Commodities are priced in dollars, so a strong dollar raises their cost for other countries and demand falls; from 2021, though, the two moved together for a time
This issue: US dollar at 45 (neutral), Commodities at 73 (warm) — at least one is in the neutral range (40–60), so we make no call this issue.
Supported by the dataAgreement +0.68 · in step in 7 of 8 5-year periods
USD/CNYtoChina stocksCommon explanation: Ripple · renminbi weakens, China stocks fall
Sharp swings in Chinese stocks can fuel capital outflows, and outflows put pressure on the renminbi (the source discusses 2015–16)
This issue: USD/CNY at 31 (cool), China stocks at 68 (warm) — USD/CNY below normal, China stocks above normal, in line with the common explanation (this is an inverse link).
Supported by the dataAgreement +0.78 · in step in 3 of 3 5-year periods
USD/JPYtoWorld stocksCommon explanation: Ripple · a sharp rise in the yen weighs on world stocks
Positions funded in yen are forced to unwind together, and stock markets around the world come under pressure at the same time
This issue: USD/JPY at 94 (hot), World stocks at 72 (warm) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.13 · in step in 18 of 31 5-year periods
German 10-yr yieldtoEUR/USDCommon explanation: Cause · euro strengthens
When European rates rise relative to US rates, money flows into the euro
This issue: German 10-yr yield at 100 (hot), EUR/USD at 73 (warm) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.35 · in step in 0 of 3 5-year periods
Over the whole history the direction matches the common explanation but is weak, and in most periods the direction did not match, so the link counts as unstable.
USD/JPYtoJapan stocksCommon explanation: Cause · yen strengthens, Japan stocks fall
A stronger yen squeezes exporters’ profits in yen terms
This issue: USD/JPY at 94 (hot), Japan stocks at 89 (hot) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.59 · in step in 19 of 31 5-year periods
Japan 10-yr yieldtoUSD/JPYCommon explanation: Cause · yen strengthens
Rising Japanese rates make borrowing yen to invest costlier, so money flows back to Japan
This issue: Japan 10-yr yield at 100 (hot), USD/JPY at 94 (hot) — both above normal, not in line with the common explanation (this is an inverse link).
Not visible in our dataAgreement −0.06 · in step in 10 of 16 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
USD/TWDtoTaiwan stocksCommon explanation: Ripple · Taiwan dollar strengthens, Taiwan stocks rise
Foreign money flowing in lifts both the Taiwan dollar and Taiwan stocks
This issue: USD/TWD at 76 (warm), Taiwan stocks at 99 (hot) — both above normal, not in line with the common explanation (this is an inverse link).
Not visible in our dataAgreement +0.03 · in step in 14 of 15 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.