Chartists, Fundamentalists, and Dispersion in the Foreign Exchange Market
Title | Chartists, Fundamentalists, and Dispersion in the Foreign Exchange Market PDF eBook |
Author | Ron Jongen |
Publisher | |
Pages | 34 |
Release | 2009 |
Genre | |
ISBN |
This paper examines the dispersion of beliefs of market participants in the foreign exchange market and their relative role in forming exchange rate expectations. We find distinct variations in the level of dispersion and document that dispersion arises because of a combined effect of market participants holding private information and participants attaching different weights to fundamental, technical, and carry trade analyses. We also document evidence that chartist rules are predominantly used in the shorter spectrum of the forecast horizon and fundamentalist rules are predominantly used in the longer spectrum, and that the importance attached to these rules is adapted through time.
Exchange Rate Forecasting Techniques, Survey Data, and Implications for the Foreign Exchange Market
Title | Exchange Rate Forecasting Techniques, Survey Data, and Implications for the Foreign Exchange Market PDF eBook |
Author | International Monetary Fund |
Publisher | International Monetary Fund |
Pages | 32 |
Release | 1990-05-01 |
Genre | Business & Economics |
ISBN | 1451975007 |
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.
Chartists, Fundamentalists, and Trading in the Foreign Exchange Market
Title | Chartists, Fundamentalists, and Trading in the Foreign Exchange Market PDF eBook |
Author | Jeffrey A. Frankel |
Publisher | |
Pages | 0 |
Release | 2002 |
Genre | |
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The overshooting theory of exchange rates seems ideally designed to explain some important aspects of the movement of the dollar in recent years. Over the period 1981-84, for example, when real interest rates in the United States rose above those of its trading partners (presumably due to shifts in the monetary/fiscal policy mix), the dollar appreciated strongly. It was the higher rates of return that made U.S. assets more attractive to international investors and caused the dollar to appreciate. The overshooting theory would say that, as of 1984 for example, the value of the dollar was so far above its long-run equilibrium that expectations of future deprecation were sufficient to offset the higher nominal interest rate in the minds of international investors. Figure 1 shows the correlation of the real interest differential with the real value of the dollar, since exchange rates began to float in 1973.
Switching Between Chartists and Fundamentalists
Title | Switching Between Chartists and Fundamentalists PDF eBook |
Author | Robert J. Vigfusson |
Publisher | |
Pages | 34 |
Release | 1996 |
Genre | Banks and banking |
ISBN |
Exchange Rate Forecasting Techniques, Survey Data, and Implications for the Foreign Exchange Market
Title | Exchange Rate Forecasting Techniques, Survey Data, and Implications for the Foreign Exchange Market PDF eBook |
Author | Jeffrey A. Frankel |
Publisher | |
Pages | 46 |
Release | 1991 |
Genre | Foreign exchange |
ISBN |
Chartists, Fundamentalists, and Exchange Rate Fluctuations
Title | Chartists, Fundamentalists, and Exchange Rate Fluctuations PDF eBook |
Author | Frank H. Westerhoff |
Publisher | |
Pages | 159 |
Release | 2002 |
Genre | |
ISBN | 9783832207892 |
Chartists and Fundamentalists in the Currency Market and the Volatility of Exchange Rates
Title | Chartists and Fundamentalists in the Currency Market and the Volatility of Exchange Rates PDF eBook |
Author | Mikael Baskj |
Publisher | |
Pages | |
Release | 2002 |
Genre | |
ISBN |