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On the Inadequacy of Newswire Reports for Empirical Research on Foreign Exchange Interventions

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Author Info
Fischer, Andreas () (Swiss National Bank)

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Abstract

Newswire reports have become an accepted tool for empirical studies analyzing informational asymmetries in FX markets. This paper tests the accuracy of such reports for Swiss interventions in the foreign exchange market. The evidence finds that the time stamp of the reports does not always lie near the recorded time of the first intervention trade as is commonly assumed in market microstructure studies. The standard deviation of the time difference is measured in hours and not in minutes. These and other regression results question the accuracy of newswire reports for Swiss interventions.

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File URL: http://www.snb.ch/n/mmr/reference/working_paper_2005_02/source/working_paper_2005_02.n.pdf
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Publisher Info
Paper provided by Swiss National Bank in its series Working Papers with number 2005-2.

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Length: 29 pages
Date of creation: 01 Jan 2005
Date of revision:
Handle: RePEc:ris:snbwpa:2005_002

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Related research
Keywords: Central Bank Interventions; Intra-Daily Data; Newswire Reports;

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Find related papers by JEL classification:
F31 - International Economics - - International Finance - - - Foreign Exchange
F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

Cited by:
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  1. Michael Melvin & Lukas Menkhoff & Maik Schmeling, 2008. "Automating Exchange Rate Target Zones: Intervention via an Electronic Limit Order Book," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  2. Lukas Menkhoff, 2008. "High-Frequency Analysis of Foreign Exchange Interventions: What do we learn?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Rasmus Fatum & Michael M. Hutchison, 2008. "Evaluating Foreign Exchange Market Intervention: Self-selection, Counterfactuals and Average Treatment Effects," Working Papers 022008, Hong Kong Institute for Monetary Research. [Downloadable!]
  4. Rasmus Fatum, 2009. "Official Japanese Intervention in the JPY/USD Exchange Rate Market: Is It Effective and Through Which Channel Does It Work?," IMES Discussion Paper Series 09-E-12, Institute for Monetary and Economic Studies, Bank of Japan. [Downloadable!]
  5. Michael Melvin & Lukas Menkhoff & Maik Schmeling, 2009. "Exchange Rate Management in Emerging Markets: Intervention via an Electronic Limit Order Book," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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