Chartists, Fundamentalists, and Trading in the Foreign Exchange Market

# Chartists, Fundamentalists, and Trading in the Foreign Exchange Market > OpenAlex Metadata Hub · https://openalex.org/W1516422303 ## Bibliographic - **DOI:** — - **Year:** 1990 - **Citations:** 352 - **Open Access:** No (closed) - **License:** — - **Source:** https://ideas.repec.org/a/aea/aecrev/v80y1990i2p181-85.html ## Authors - Jeffrey A. Frankel - Kenneth Froot ## Abstract The overshooting theory of exchange rates seems ideally designed to explain some important aspects of the movement of the dollar in recent years. Over the period 1981-1984, for example, when real interest rates in the United States rose above those among trading partners (presumably due to shifts in the monetary/fiscal policy mix), the dollar appreciated strongly. It was the higher rates of return that made U.S. assets more attractive to international investors and caused the dollar to appreciate. The overshooting theory would say that, as of 1984 for example, the value of the dollar was so far above its long-run equilibrium that expectations of future depreciation were sufficient to offset the higher nominal interest rate in the minds of international investors. (Figure 1 shows the correlation of the real interest differential with the real value of the dollar, since exchange rates began to float in 1973.) ## Keywords Liberian dollar, Economics, Monetary economics, Float (project management), Exchange rate, Interest rate, Value (mathematics), Interest rate parity, International Fisher effect, Covered interest arbitrage, Financial economics, Real interest rate, Nominal interest rate, Finance ## Concepts - Liberian dollar - Economics - Monetary economics - Float (project management) - Exchange rate - Interest rate - Value (mathematics) - Interest rate parity - International Fisher effect - Covered interest arbitrage - Financial economics - Real interest rate - Nominal interest rate - Finance - Machine learning - Management - Computer science --- *Metadata only — full text not imported unless Open Access license permits.*

Bài “Chartists, Fundamentalists, and Trading in the Foreign Exchange Market” được TradingBase chuyển thành Knowledge Product cho trader — không phải trang đọc abstract OpenAlex. Tóm lược học thuật (đã diễn giải): The overshooting theory of exchange rates seems ideally designed to explain some important aspects of the movement of the dollar in recent years. Over the period 1981-1984, for example, when real interest rates in the United States rose above those among trading partners (presumably due to shifts in the monetary/fiscal policy mix), the dollar appreciated strongly. It was the higher rates of return that made U.S. assets more attractive to international investors and caused the dollar to appreciate. The overshooting theory would say that, as of 1984 for example, the value of the dollar was so far above its long-run equilibrium that expectations of future depreciation were sufficient to offset the higher nominal interest rate in the minds of international investors. (Figure 1 shows the correlation of the real interest differential with the real value of the dollar, since exchange rates bega… Phần Trading Insights bên dưới nối nghiên cứu với Forex, vàng, USD, lãi suất và risk regime — để bạn đưa vào journal và playbook. Metadata DOI/OA chỉ là rail tham chiếu; nội dung chính là summary, takeaways và ứng dụng thị trường do Content Factory sinh.