Why is it when the dollar goes down the euro goes up? And what are all of those treasury auctions that happen weekly in the stock market like the one that was done today for 12billion. Please explain the mechanics step by step. Thanks.
Hi it is not necessarily true.
While a currency can go up and down versus another currency, it does not have to be only the euro.
For example the dollar may go down vs the AUD due to some event while remains relatively stable vs the EURO.
I don't think the treasury auctions belong to the stock market. Rather they belong to the bond markets.
Basically investors buying those bonds are loaning money to the treasury for a fixed amt of interest rate at a specific tenure.
It only goes up or down in relation to that currency. They are not independent of each other. The dollar can go down against the Euro, but Up against the Yen at the same time.
But usually when they say the "dollar is down" they are talking about the dollar index, which is a basket of currencies against the dollar of which the Euro is one of them.
It is not always like that ,it depends you are looking dollar against euro or euro vs any other currency,if u look in stock market US Dollar vs Euro ,only one can go up and second will have to go down.If you want more details ,not easy to explain here go to FXCN.COM, O AND A.COM, BLOOMBERG.COM and if u want a free lesson on how these curriency trade works then go to www.ampfutures.com and talk to broker live.
Because countries play money games so they can make money off of the exchange rate going up and down--you could too--just like the stock market.
Because there is no "absolute" value of money. Currencies are quoted in terms of other currencies.
Because the dollar can only go "down" in relation to the other currencies.