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FX Trading and Exchange Rate Dynamics

In: Studies in Foreign Exchange Economics

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  • Martin D. D. Evans

Abstract

The origins of nominal exchange rate dynamics remain elusive. In particular, there is no widely accepted explanation for the sizable short- and medium-term movements in the dollar during the floatingrate period. More generally, theoretical models relating exchange rates to macroeconomic fundamentals are still outperformed by simple time-series models in forecasting spot rates over short- and medium-term horizons [Frankel and Rose (1995)]…

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  • Martin D. D. Evans, 2017. "FX Trading and Exchange Rate Dynamics," World Scientific Book Chapters, in: Studies in Foreign Exchange Economics, chapter 5, pages 189-245, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789813148543_0005
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    More about this item

    Keywords

    Exchange Rates; Foreign Currency; Microstructure;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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