I'd like to understand a little better or confirm what I think I understand of the relationships between them. First what I think I understand...
1.Treasuries and yields have an inverse relationship.
2. When yields go up the dollar goes up.
But wait, in times of risk aversion, money flows to treasuries and the dollar goes up but yields fall as in 1, so that 2 isn't right? Or 2 is right except for period of risk aversion? as with risk aversion investors are willing to receive less yield for less risk.
OK, recently the dollar's made a hell of a turn. Now there is a lot of risk aversion with the bailouts in Europe for example, but I believe yields have also been going up which means that investors are not buying treasuries right? And this despite the fed also buying treasuries. So what is going on? Or where is the money going? To US dollar saving accounts?
Anyone can help me out? Thanks.
1.Treasuries and yields have an inverse relationship.
2. When yields go up the dollar goes up.
But wait, in times of risk aversion, money flows to treasuries and the dollar goes up but yields fall as in 1, so that 2 isn't right? Or 2 is right except for period of risk aversion? as with risk aversion investors are willing to receive less yield for less risk.
OK, recently the dollar's made a hell of a turn. Now there is a lot of risk aversion with the bailouts in Europe for example, but I believe yields have also been going up which means that investors are not buying treasuries right? And this despite the fed also buying treasuries. So what is going on? Or where is the money going? To US dollar saving accounts?
Anyone can help me out? Thanks.