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You are on the USD/euro market, buying or selling euro against the USD. Interpret the event of the Chinese governments decision to sell a large
You are on the USD/euro market, buying or selling euro against the USD. Interpret the event of the Chinese governments decision to sell a large /a 100+ bill/ amount of US T- bonds. What is going to be the very likely, yet not definitive impact of this sale on the price of USD/euro ? What main assumptions do you make to have arrived at your prediction ? Discuss min. 2 factors of uncertainty. Draw a graph with labels, indicate the old and the new price positions after the event.
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