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What effect does Dow Jones have in Forex trading?
fundamental
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- John Ka...
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- 1 year ago
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Like gold the U.S. dollar is a safe haven, so effectively when there is fear in the market or confidence is low the dollar would appreciate. So dollar is up typically Dow and other indexs down. |
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If the Dow Jones Index falls, then the higher yielding currencies tend to fall against the low yielding currencies. The opposite is true if the Dow Jones gains. |
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It is like when Dow jones go up,the dollar value comes down and when dow jones go down ,the dollar value increases. |
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The Dow and the Dollar are positively correlated (the Dollar strengthens along with the DJIA) and that The Dollar can strengthen even if the Dow does not. The Dollar sometime follow Nasdaq instead. see the attached chart. (please note, the currency pair is reversed USDEUR. Source(s): http://www.kshitij.com/research/djus060201.shtml
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Its like when dow jones is down, we can see some gains in the dollar value. And just the opposite when dow jones is up. |
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Usually when the dow goes down the dollar gains value. The opposite when the dow goes up, the dollar losses value. |
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Overly optimistic and pessimistic market participants' sentiment in stock market will overflow to Forex market by fueling risk appetite or risk aversion sentiment in currency trading. |
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