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Gary -
The relationship between US investments and the dollar is very far from
a direct one. First of all, you need to always remember that the
dollar's gains and losses are not just due to the bond or stock market,
and for that matter, money will not necessarily flow into bonds or
stocks because the dollar is strong. The dollar is used as a medium of
exchange in trade, so part of the dollar's demand -- a large part of it
-- is as a medium of trade.
Right now, rightly or wrongly, alot of folks are worried that the Fed
could raise rates. Why would you own bonds if you believed that rates
were going to rise? You would probably buy time deposits. Notice that
the curve, I think, is steeper of late.
There is much more to the story than that, and I do not pretend to have
all the answers, but that might be part of it.
Steve
--
Steven W. Poser, President
Poser Global Market Strategies Inc.
http://www.poserglobal.com
Gary Funck wrote:
>
> the US$ made a big move up at the expense of the dmark and jyen Friday,
> but the bond was down a little (rates higher). This up-trend in the
> US$ has been in place for a while, and the bond is testing the bottom
> of its trading range.
>
> I thought that as the big players moved into dollars, they'd also tend
> to buy othe US$ denominated assets like the bonds, or stocks, but
> both US bonds and stocks have been looking weak of late. Does that
> mean the money is just 'parked' into US$ waiting to be deployed?
>
> Any ideas on the significance, if any of a stronger dollar, but weaker
> bond? Any opinions on the impact on US stocks?
>
> --
> | Gary Funck, Intrepid Technology, gary@xxxxxxxxxxxx, (650) 964-8135
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