Associate
|
If the FED decides to cut rates, stock would rise because money is cheaper and that is generally considered good for the economy. However, the currency markets would act in a different way. Lets take the EUR-USD pair, for example. If the FED cuts rates, then it means that there is going to be more money on the market, meaning that the value of a dollar will decrease against the euro. If the rates are higher in Europe than is the US, then the euro is more valuable to hold. If the FED really decides to cut rates, we will see the dollar plummet to records lows against the euro (1994 level will by passed). Right now, it (EURUSD) is sitting at 1.4425 - 1.4450.
The price of oil would also rise because oil is traded in dollars, which means that if the dollar is worth less, then the price of oil would have to rise, because the value of oil stays the same. However, there are more factors than one that make up the price of oil. Recently, there's been problems with Mexican supplies, but as they were dealt with, the price went down a bit. |
|
stock market game on the web. At eInvesting you compete for monthly cash prizes while you interact, make virtual dollars, purchase items, and trade in the realistic stock market simulator. We make investing FUN!
