{"id":4149,"date":"2024-10-24T08:49:08","date_gmt":"2024-10-24T08:49:08","guid":{"rendered":"https:\/\/apex-aiexperts.com\/?p=4149"},"modified":"2024-10-24T08:49:08","modified_gmt":"2024-10-24T08:49:08","slug":"how-the-stock-market-affects-the-forex-market","status":"publish","type":"post","link":"https:\/\/apex-aiexperts.com\/es\/how-the-stock-market-affects-the-forex-market\/","title":{"rendered":"C\u00f3mo afecta el mercado de valores al mercado Forex"},"content":{"rendered":"

Let\u2019s see how the forex market can affect the stock market, specifically stock indexes.<\/p>\n\n\n\n

When people talk about the stock market, you generally hear them using a stock market index in reference to the market\u2019s performance.<\/p>\n\n\n\n

A stock market index is simply a curated basket of certain stocks<\/strong>. This list of stocks is a way to get a broad measure of what\u2019s happening in the stock market.<\/p>\n\n\n\n

In this lesson, we discuss how currencies can have an effect on two specific stock indexes:<\/p>\n\n\n\n

    \n
  1. En\u00a0Nikkei 225<\/strong>\u00a0more commonly called the\u00a0Nikkei<\/strong>, the Nikkei index, or the Nikkei Stock Average is a Japan stock market index that measures the stock performance of Japan\u2019s largest 225 companies listed on the Tokyo Stock Exchange (TSE).<\/li>\n\n\n\n
  2. En\u00a0Dow Jones Industrial Average<\/strong>, Dow Jones, or simply the\u00a0Dow<\/strong>, is a U.S. stock market index that measures the stock performance of 30 large American companies listed on the New York Stock Exchange (NYSE) and the NASDAQ.<\/li>\n<\/ol>\n\n\n\n

    Nikkei and USD\/JPY<\/h2>\n\n\n\n

    Before the global economic recession that started in 2007, when most economies suffered consecutive quarters of negative GDP growth, the Nikkei and the USD\/JPY were inversely correlated<\/strong>.<\/p>\n\n\n\n

    Investors believed that the performance of the Japanese stock market reflected the status of the country, so a rally in the Nikkei led to a strengthening of the yen.<\/p>\n\n\n\n

    The opposite also held true. Whenever the Nikkei would drop, USD\/JPY would rise as well.<\/p>\n\n\n\n

    \"Nikkei's<\/a><\/figure>\n\n\n\n

    When the financial crisis hit, however, the relationships just went crazy like Lindsay Lohan.<\/p>\n\n\n\n

    The Nikkei and USD\/JPY, which used to move oppositely, now move in the same direction.<\/p>\n\n\n\n

    Amazing isn\u2019t it?<\/p>\n\n\n\n

    Who would\u2019ve thought that stocks would have something to do with the foreign exchange market?<\/p>\n\n\n\n

    Correlation Between USD\/JPY and Dow<\/h2>\n\n\n\n

    Let\u2019s take a look at the correlation between the USD\/JPY and the Dow.<\/p>\n\n\n\n

    Generally, the strength or weakness of the dollar, impacts the U.S. stock market, particularly stocks of large multi-national corporations (MNCs).<\/p>\n\n\n\n

    For large U.S. multinationals that sell goods and services overseas, a rising U.S. dollar can put a crimp into the profits.<\/p>\n\n\n\n

    If the dollar is strong, it makes a difference for those companies since it makes it difficult for them to increase prices or even maintain sales at current levels.<\/p>\n\n\n\n

    That said, you might assume that the USD\/JPY and Dow would be highly correlated.<\/p>\n\n\n\n

    However, a look at the chart below would tell you that it isn\u2019t quite the case. While the correlation is positive, it isn\u2019t as strong.<\/p>\n\n\n\n

    \"Dow's<\/a><\/figure>\n\n\n\n

    Take a look at the Dow (blue line).<\/p>\n\n\n\n

    It peaked at 14,000 late in 2007 before dropping like a hot potato in 2008.<\/p>\n\n\n\n

    At the same time, USD\/JPY (orange line) also fell, but not as sharply as the Dow.<\/p>\n\n\n\n

    This serves as a reminder that we should always take into account fundamentals, technicals, and market sentiment, so always read up!<\/p>\n\n\n\n

    Don\u2019t take correlations for granted because they aren\u2019t a sure-fire thing!<\/p>","protected":false},"excerpt":{"rendered":"

    Let\u2019s see how the forex market can affect the stock market, specifically stock indexes. When people talk about the stock market, you generally hear them using a stock market index in reference to the market\u2019s performance. A stock market index is simply a curated basket of certain stocks. This list of stocks is a way to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77,80],"tags":[],"class_list":["post-4149","post","type-post","status-publish","format-standard","hentry","category-undergraduate-sophomore","category-using-equities-to-trade-fx"],"_links":{"self":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/4149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/comments?post=4149"}],"version-history":[{"count":1,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/4149\/revisions"}],"predecessor-version":[{"id":4150,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/4149\/revisions\/4150"}],"wp:attachment":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/media?parent=4149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/categories?post=4149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/tags?post=4149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}