FX Market Watch
As a politician, the President did not want to interrupt television viewers watching the tremendously popular TV series Bonanza, not wishing to potentially alienate those voters who fanatically followed the cowboy series. He was advised that the practical decision was to make an announcement before the stock markets opened on Monday (and just when Asian markets also were opening trading for the day). On 15 August 1971, that
speech
and the price- control plans proved very popular and raised the public’s spirit. The President was credited with finally rescuing the Am e ri c a n public from price-gougers, and from a foreign-caused exchange crisis.”
forces. And being as banks are for profit private institutions, any available data or models they have is not public.
No Forex Model
Since the Nixon Shock, economic theories
were not redesigned.
Roger D. Huang published a paper in 1981 for the American Finance Association with the following abstract:
“Te variance bounds on exchange rate movements implied by the monetary approach to exchange rate in an efficient foreign exchange market is shown to be violated by sample data. Te paper also presents evidence showing that the forecast implied
by
errors the
Why did Nixon float the dollar, who suggested it, and how does that impact modern Forex?
This would also hint it was a knee- jerk reaction more than a carefully planned event.
Since then, banks
have been creating models ‘on the fly’ based on what seems to be working, with little or no understanding of the underlying
36 FX TRADER MAGAZINE April - June 2012
Although there are some fresh ideas about what Forex is, there isn’t any unified theory of Forex, a model that describes it for what it is, mathematically.
papers have been written with the hypothesis
that existing
In fact, several ‘models’
are severely flawed, and provide evidence; here’s one:
monetary model can be forecasted using historical data. Te results are interpreted to suggest either the incompatibil ity of the monetary approach with sample data, or an inefficient foreign exchange market or both.”
Richard J. Sweeny, in 1986, goes on
to claim that there is Alpha in Forex not explainable by risk:
“Filter rule profits found in foreign exchange markets in the early days of the current managed float persist in later periods, as shown by statistical tests
here. Te test
developed and implemented is
consistent with,
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102