Hi,
I’m new to the world of forex and have a question related to US Dollar/Bonds.
It appears a fed rate hike in December is becoming increasingly likely, and the press associate this news with a strengthening US dollar.
My question is - If there is an increasingly likely rate hike in December, why is the dollar strengthening? Surely logic would suggest investors should wait until the rate hike is observed in December and benefit from higher yielding bonds? Or would money flow be into another asset class other than bonds?
Is this a fair assumption to make, or is there a key point i am missing?
Any guidance would be welcome.
Thanks.
CSB90