Journal Article

What determines the exchange rate: economic factors or market sentiment?


Abstract: Do economic factors influence exchange rates? Or does market sentiment play a bigger role? Are short-run exchange rates predictable? Greg Hopper reviews exchange-rate economics, focusing on what is predictable and what isn't. He also examines the practical implications of exchange-rate theories for currency option pricing, risk management, and portfolio selection.

Keywords: Foreign exchange rates;

Access Documents

Authors

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Business Review

Publication Date: 1997

Issue: Sep

Pages: 17-29