Forex Yen
forex yen
The relationship between exchange rates, interest rates – the correlation between stock markets and Amazing Forex rate
The Relationship between the exchange rate, interest rates
No exchange rates have nothing to do with stocks? Think again. They are, in fact, very family Nearby, in particular the relationship or the Nasdaq and the Dow Jones U.S. Dollar, Yen Yen and the cross. If you follow the daily exchange of news, you'll notice expressions as "The yen and a weaker dollar as rising stock market" or "Yen was hammered as stocks fell." In In effect, professional traders and accept this as an indisputable fact that they see no need to mention in the news.
Let me give some examples. Four months ago, before most of bad financial news has been released to the media, the dollar and the yen was hurt, where the cost of approximately $ 1.50 euros, and took more of 180 yen in exchange for one pound sterling (GBP). But everything collapsed all of a sudden a few days when the U.S. government has officially announced that the recession had already begun a year earlier. Soon after, several large banks have collapsed in the world quickly fell all securities markets. And as you can see, the U.S. is quickly gained ground among all members (except JPY) and the yen also appreciated the same way. Today, as I write this, a euro worth $ 1.30 (after dropped as low as 1.22 a few weeks), and Sterling can be changed by only 146 yen.
But that was what happened during a period of four months. You can see these rates fluctuate with the market almost instantly actions every day. The first question a novice operator can ask is "why?" Most experts agree that the exchange market, Forex is very similar to the stock exchange in terms of speculation, where price action is highly dependent on in anticipation of what will happen rather than what has already happened, or what is happening now. In other words, the mood of mobile operators in the market. If traders feel good about the economy, which buy stocks for investment, while when the financial future seems to be threatened, they sell. And when there are more buyers than sellers, demand is increasing, and therefore the price. The relationship between exchange rates, interest rates
The nature of the forex market, however, is more sophisticated. When it comes to coins, is always involved at least two different countries (or country), not one as in the stock market. Thus, the exchange rate is affected by the economies concerned (In each currency pair). For example, when trading the GBP / JPY, you have to watch what happens Japan and England. Now just the basics. The funny thing is that while not much to do in one of these two countries, this currency pair is in fact given by what is happening in America! The reason? This is the "factor risk "that affects so Yen, affecting their turn this pair of types.
So what exactly is the "risk factor"? The factor risk of a currency depends on geopolitical stability and interest rates. When there is nothing of the kind of war going on, this risk factor depends mainly on interest rates. JPY is considered low risk because it has the lowest interest rates among the majors with only 0.10%, followed by the dollar to 0.25%. On the other extreme, you can see the high-risk currencies like AUD and NZD. For more performance, traders borrow in low-interest yen to invest in coins high interest, known as carry trade activities. The U.S. dollar, however, has always been considered low risk (and hence low yield), mainly due to the size of the U.S. economy. When you buy a Treasury Note (underlying stability of the dollar), you know it's the safest investment you can obtain. The reason is that most stronger than the U.S. economy, the dollar probably will not evaporate in the air.
With the risk factor, traders and JPY USD more when they perceive more risk in the market (stock market down). On the other hand, when the economy is perceived as stable, dump coins low risk in seeking higher-yielding counterparts, the concept known as "risk appetite" in the business world. In conclusion, you close your portfolio to the main currency pairs and cross-Yen, then you just look at the stock market to make their business decisions. The relationship between exchange rates, interest rates
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