On the presence of a day-of-the-week effect in the foreign exchange market

Article Abstract:

A study is conducted to ascertain the existence of the day-of-the-week effect in the foreign exchange market. A comprehensive data set of six exchange rates is applied to two different types of distributional assumptions and distribution-free tests. Results show that there were higher returns on Wednesdays before Oct. 1, 1981, for the British pound, the Canadian dollar, the Deutsch mark, the French franc, the Swiss franc and the Japanese yen. After the settlement procedures were changed Oct 1, 1981 so that delivery would occur within two days, there were no more differential Wednesday returns.

Foreign exchange market

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Currency risks in emerging markets investments

Article Abstract:

It is imperative for international investors to understand currency risks so that they can make better investment decisions. Currency risk includes the changing values of foreign currency, the uncertain provisions for currency conversion in developing countries, and the relationship between capital flows and currency values. Currency risks in emerging markets investments are examined by comparing equity market returns and currency fluctuations in eight emerging economies and four industrialized countries. The findings are discussed.

Foreign investments, Economic aspects, Risk (Economics), Developing countries

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