Marc Chandler submits:The Baltic Dry Index has fallen for the 28th consecutive session today, making this the longest decline in six years. During this swoon the index has fallen 49%. The main driver seems to be concerns about the cooling of China's steel sector. Steel is the biggest user of iron ore. Iron ore and coking coal account for more than a third of the baltic dry freight.
The correlation between the Baltic Dry Index and some currency pairs have increased markedly over the past couple of months. Of note, the strongest correlation over the past two months has been with the Korean won/dollar at about 0.4. From the beginning of the year through 8 May, the correlation was 0.036.
Of the various currency pairs we looked at the Israeli shekel was also interesting. The dollar-shekel correlation has risen to 0.37 from 0.05 in the the start of the year through 8 May period.
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