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What happens if the UK and the Eurozone interest rates start to compare favorably with those in the US?
One of the points being made recently is that money keeps flowing into US treasuries from Europe because the effective yield is still better.

So if the yields become more comparable will this flow stop or reverse? And if it does, what will happen to the relative values of the currencies? Is anyone in any of the central banks concerned?

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Sat Nov 12th, 2005 at 02:09:27 PM EST
Isn't the interest rate (or bond yields) inversely correlated to the long-term market expectation of the value of the currency?

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Sat Nov 12th, 2005 at 03:01:56 PM EST
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