How Do UK-Based Foreign Exchange Dealers Think Their Market Operates?
Menzie Chinn () and
Ian Marsh ()
No 2230, CEPR Discussion Papers from C.E.P.R. Discussion Papers
This paper summarises the results of a survey of UK based foreign exchange dealers conducted in 1998. It addresses topics in three main areas: The microeconomic operation of the foreign exchange market; the beliefs of dealers regarding the importance, or otherwise, of macroeconomic fundamental factors in affecting exchange rates; microstructure factors in FX. We find that heterogeneity of traders' beliefs is evident from the results but that it is not possible to explain such disagreements in terms of institutional detail, rank or trading technique (e.g. technical analysts versus fundamentalists). As expected, non-fundamental factors are thought to dominate short horizon changes in exchange rates, but fundamentals are deemed important over much shorter horizons that the mainstream empirical literature would suggest. Finally, market ‘norms' and behavioural phenomena are very strong in the FX market and appear to be key determinants of the bid-ask spread
Keywords: Foreign Exchange; Microstructure; Survey Data; Technical Analysis (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Journal Article: How do UK-based foreign exchange dealers think their market operates? (2004)
Working Paper: How Do UK-Based Foreign Exchange Dealers Think Their Market Operates? (2000)
Working Paper: How do UK-Based Foreign Exchange Dealers Think Their Market Operates? (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2230
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2230
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().