Exchange Rate Forecasting Techniques, Survey Data, and Implications for the Foreign Exchange Market

International Monetary Fund

No 1990/043, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the dynamics of the foreign exchange market. The first half addresses a number of key questions regarding the forecasts of future exchange rates made by market participants, by means of updated estimates using survey data. Here we follow most of the theoretical and empirical literature in acting as if all market participants share the same expectation. The second half then addresses the possibility of heterogeneous expectations, particularly the distinction between “chartists” and “fundamentalists,” and the implications for trading in the foreign exchange market and for the formation of speculative bubbles.

Keywords: WP; exchange rate; investor; rate; exchange risk premium; deutsche mark; trading room; British pound; standard deviation; market participant; Return on investment; Currency markets; Exchange rates; Depreciation; Global (search for similar items in EconPapers)
Pages: 32
Date: 1990-01-01
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=27052 (application/pdf)

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:imf:imfwpa:1990/043

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().