What are the outliers for this pair? Where does the weak dollar not become good for stocks and vice versa?
When it finally spooks the bond market (which it hasn't yet) As long as bond markets remain stable, weak dollar will help the stock market.
Possibly there's also another feedback loop in relation to US imports of commodities ... As dollar weakens, US$ costs of - for example - imported oil may rise. This would result in higher costs for many business (lower profits, so lower stock prices), and higher transport & heating costs for consumers (who therefore spend less, so lower profits for business, so lower stock prices). Also, another angle ... a weaker dollar potentially weakens attractiveness of US$ as an international reserve currency; at some point (not there yet!), alternatives (like â¬) become more attractive; investors drop US$ bonds, bond market falls, US$ bond yields rise, stocks fall ...