 Large changes in major exchange rates: a chronicle of the 1990sB. J. Lobo Applied Financial Economics, 2002, vol. 12, issue 11, 805-811 Abstract: In the continuing effort to understand exchange rate changes, this article chronicles and analyses, for the first time, the proximate reasons for large daily movements in four leading US dollar exchange rates in the 1990s. A sample of 111 events highlights the importance of expectations and the role of subtle political influences on currency markets. While 19% of all events studied had mainly economic reasons, over 60% of all events could be partly or wholly attributed to political factors. Events related to monetary policy changes were the most significant economic factor, while intervention activity and war/coup attempts were the most significant political factors. This research indicates that large changes in the Japanese yen were caused mostly by the political dynamics of the bilateral trade balance, while big moves in the German mark and British pound stemmed mainly from European politico-economic events. The enigmatic Canadian dollar was driven by domestic politics related to the Quebec secession issue. Date: 2002 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apfiec:v:12:y:2002:i:11:p:805-811 Ordering information: This journal article can be ordered from DOI: 10.1080/09603100110088157 Access Statistics for this article Applied Financial Economics is currently edited by Anita Phillips More articles in Applied Financial Economics from Taylor & Francis Journals |
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