Hello. I’m new to the forex field, and I am a freshman studying finance. I really want to understand everything clearly, and I’m having an issue with what affects the USD.
For example, on the lesson " How Bond Yields Affect Currency Movements", they say that if the stock market seems risky (meaning it might drop), more investors steer away from stocks, and buy bonds and the safe-haven US Dollar, therefore raising the the price of the USD higher.
However, in the lesson " The Relationship Between Stocks and Forex", they say that a stronger stock market mans a stronger economy, which means more investment in the country and currency, which means a stronger USD.
Am I missing something? Doesn’t this mean that the USD will increase in both cases, a bad economy or good one, since demand for the USD increases in both cases?
So what are the true fundamental indicators that tell me to buy EUR/USD? Or can someone please explain how this works or if I’m missing something? Thanks.