Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals

Mosab I. Tabash (), Muhammad AsadUllah, Quratulain Siddiq, Marwan Mansour, Linda Nalini Daniel and Mujeeb Saif Mohsen Al-Absy
Additional contact information
Mosab I. Tabash: Department of Business Administration, College of Business, Al Ain University, Al Ain P.O. Box 64141, United Arab Emirates
Muhammad AsadUllah: Karachi Institute of Economics and Technology, College of Management Sciences, Karachi 75080, Pakistan
Quratulain Siddiq: School of Economics and Business Administration, Chongqing University, Chongqing 400044, China
Marwan Mansour: Accounting Department, Business Faculty, Amman Arab University, Amman 11953, Jordan
Linda Nalini Daniel: Business Department, Higher Colleges of Technology, Abu Dhabi P.O. Box 41012, United Arab Emirates
Mujeeb Saif Mohsen Al-Absy: Accounting and Financial Science Department, College of Administrative and Financial Science, Gulf University, Sanad 26489, Bahrain

Economies, 2024, vol. 12, issue 12, 1-16

Abstract: The purpose of this study is to find symmetries and asymmetries in the exchange rate and macroeconomic fundamentals of advanced European markets, namely Denmark, the Euro Area, and United Kingdom, for the period of 2011 to 2022 via application of the NARDL technique. The findings reveal that interest rate affects DKK exchange rate asymmetrically in the long and short run, whereas money supply affects it in the short run. Foreign reserves are found to be helpful for all three currencies in stabilizing the exchange rate. A decline in gold price weakens GBP, DKK, and EUR in the long run. Previous studies suggest that the existence of asymmetrical relationships justifies the selection of NARDL for empirical analysis. This study makes a contribution to the existing literature, as it proves that forecasting via NARDL is also robust for analysis. The findings have significant policy implications for financial applications.

Keywords: exchange rate; NARDL; symmetries; asymmetries; forecasting (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7099/12/12/326/pdf (application/pdf)
https://www.mdpi.com/2227-7099/12/12/326/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:12:y:2024:i:12:p:326-:d:1532316

Access Statistics for this article

Economies is currently edited by Ms. Adore Zhou

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().