The Federal Reserve as an informed foreign-exchange trader

U.S. exchange-market intervention has no apparent effect on market fundamentals but may influence expectations. If intervention can accurately forecast exchange-rate movements, knowledge that the Federal Reserve is trading can alter traders' prior estimates of the distribution of exchange-rate changes. This paper finds that U.S. intervention has value only as a forecast that recent exchange-rate movements will moderate but not that they will reverse.

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Year of publication:	1998
Authors:	Humpage, Owen F.
Institutions:	Federal Reserve Bank of Cleveland
Subject:	Foreign exchange \| Law and legislation

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Extent:	application/pdf
Series:	Working Paper.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 9815
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005428264