this mean increase price of curencies like us dollar and british pound
and that is a good thing
Not sure what you’re asking?
Are you saying that if bond prices are rising, you feel currencies would rise accordingly?
Intermarket relationships are a very challenging concept to grasp.
The relationships aren’t always as black-and-white as everyone would like to think.
Sometimes, the correlations can trend perfectly for weeks, months, but then break down randomly and send your compass spinning.
Currencies are valued in terms of a currency pair.
So, to gauge the strength of the dollar we look @ it’s performance vs. a basket of competing currencies.
Don’t forget that bond yield and price move inversely.
So, when yields are falling, that means that prices are rising (demand)
When yields are rising, that means that prices are falling (supply)
Theoretically, if USD yields are falling, you’d expect to see the underlying currency rise (as investors demand yield through bonds, they must exchange their home country’s currency for USD).
But, the value of the USD isn’t solely based on whether or not foreign investors are buying or selling US debt.
Catch my drift?
i dont understand difference between bond currency.
what do you mean byTheoretically, if USD yields are falling, you’d expect to see the underlying currency rise (as investors demand yield through bonds, they must exchange their home country’s currency for USD)."
don’t bother with such or any other possible correlations; they are just a waste of time and invaluable brain energy.
Princedodi- I’d recommend taking this advise with a grain of salt.
Intermarket relationships are very far from a waste of time and brain power. If they were, the concept wouldn’t be a prevalent topic of conversation for most every professional analyst out there. Show me a single professional who doesn’t look @ bond yields or commodity prices when studying a country’s economic strength.
As a professional trader, you need to be aware of where investors are seeking yield, and why.
You can often times find opportunities based on these relationships.
As for your question.
The price of a bond and its yield are inversely correlated. Re-read my original post and that should make sense. Search the topic out on the web- tons of videos on youtube about how government debt works and how it may impact the underlying currency of a nation auctioning that debt.
thank you sir
my question is:
is bond=curency
i.e we can called $ usa bond or usa currency
No, a bond is a bond.
A currency is a currency.
Government issued bonds are government issues pieces of debt.
Currency don’t have a set maturation date where you can call upon the issuer for your principal + interest.
Pop “how do bonds work” in youtube for more info.
when they said bond increased this mean what according to curency
Please verify if i am true or not.
a curency =$ ,gbp …
but about bond?