zondag 24 augustus 2014

Euro/USD exchange rate Vs. U.S. Bond Yield

The Euro/USD exchange rate is highly correlated to the U.S. Bond Yields.

Money flows to U.S. bonds at the same time when people flee into the U.S.dollar. So whenever U.S. bonds go up (U.S. bond yields go down), the U.S. dollar strengthens.

Let's look at the Euro/USD exchange rate as an example. Mastering this correlation will give you an edge whenever arbitrage occurs.

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