Bank of America Global Research arues that Equity breadth matters for USD controlling for level and rates.

"The S&P 500 has been largely rangebound since August but far more ink has been spilled on the decline in market breadth. Poor equity breadth has connotations for the durability of the risk rally but may also matter for the broader direction of the US dollar," BofA notes.

"Exhibit 1 and Exhibit 2 show loose correlation between the DXY index and measures of equity breadth. A narrow rally - a smaller proportion of stocks trading above 200dma and/or the underperformance of an equally-weighted S&P 500 index - is often associated with a stronger USD," BofA adds.