IntermediateMAD Academy0:44Markets

Every Price Is a Ratio

A currency has no price of its own — only a rate against another one, which is why a 'strong dollar' is always relative.

0:44 · 6 scenes

This lesson is part of a MAD Academy plan.

What the Lesson Covers

  1. 0:00A currency has no price. It only has rates against other currencies.
  2. 0:05Reading a pair. The first currency is what you are pricing. The second is what you price it in.
  3. 0:14Why 'strong dollar' needs a benchmark. The dollar can rise against one currency and fall against another on the same day.
  4. 0:23What drives the rate. Rate differentials, growth, inflation and flows. Rates usually dominate.
  5. 0:31Why equity investors care. A strong dollar shrinks foreign revenue when it is converted back home.
  6. 0:39Whenever you hear a currency called strong, ask: strong against what?
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Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Every Price Is a Ratio — MAD Academy Training Video · MadStockAlerts