Central bank intervention and trading rule profits in foreign exchange markets

Article Abstract:

Regression analysis shows that central bank intervention demonstrates strong correlation with the profitability of trading returns for the deutsch mark, Japanese yen and British pound currencies. In the case of Swiss franc and Canadian dollar, only a portion of trading rule returns is accounted for by central bank intervention. Regression analysis also demonstrate that trading profits are generated by central bank intervention while losses are brought about by non-intervention factors.

Administration of General Economic Programs, Currency Stabilization Programs, Management, Economic aspects, Foreign exchange, Central banks, Currency stabilization

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Price and trade effects of exchange rate fluctuations and the design of policy coordination

Article Abstract:

The monetary and fiscal policies of a two-country zone facing joint inflationary shock is studied. It is shown that exchange rate appreciation rests on the assumption that in the two zones, the price effect of exchange rate fluctuations is greater than the trade effect relative to the corresponding forces at work with respect to the rest of the world. This conclusion is reversed if the relative hierarchy is also reversed.

Inflation (Finance), Fiscal policy, Inflation (Economics)

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