If dollar goes down, does Dow go up?

Discussion in 'Economics' started by mrman500, Dec 14, 2008.

  1. If dollar goes down, corn goes up.

    If dollar goes down, oil goes up.

    If dollar goes down, does Dow go up?
  2. cashcow


    Depends which day it is - don't take any of those relationships for granted.
  3. I don't think it would be very positive, because dollar down is foreigners fleeing the US financial markets.
  4. richrf


    Dollar down increases costs of imports (.e.g. oil), but also makes it easier to export. It adds dollar risks to foreign investments in the U.S.

    I think net, it is usually better to have a stronger currency that attracts foreign investments. Given that every currency is unattractive at this point, I think there will be lots of ebb and flows between the different currencies, which will have only a side effect on the stock market over the short term. Watch oil though. If inflation starts seeping back in, then it will limit what the government can do via fiscal spending policies - though not stop it altogether.