The welfare aspects of dual exchange rate systems are analyzed in this paper. The requirement that domestic linancial transactions with the rest of the world be undertaken at a special foreign exchange rate is found to be equivalent to levying a tariff on this class of international transactions. Hence, a dual exchange rate system and capital controls are shown to be essentially identical. In l...

Empirical tests are performed to examine whether foreign exchange excess returns for the British pound, Canadian dollar, Deutsche mark, and Japanese yen are related to volatility in the currency market and volatility in the stock markets. Our results indicate that volatility (measured by standard deviation and variance) from currency markets is signi® cant in explaining the excess returns, sugg...

There is a great need for accurate predictions of foreign exchange rates. Many industries participate in foreign exchange scenarios with little idea where the exchange rate is moving, and what the optimum decision to make at any given time is. Although current economic models do exist for this purpose, improvements could be made in both their flexibility and adaptability. This provides much roo...

A dynamic development of financial market is accompanied by the emergence of new products on stock exchanges which give absolutely new possibilities of investing money. Currently, the most innovative financial instruments offered to investors are exchange traded products (ETP). They can be defined as financial instruments whose price depends on the value of the underlying instrument. Thus, they...

With dollar amounts in this lofty range, participants in the foreign exchange market could incur substantial losses if the other parties to their transactions ~s’ere to default on the payments required to settle their side of the transactions. To reduce the costs of transactions and limit the size of these possible losses, some banks engage in bilateral netting of their foreign exchange transac...

At the end of 1998, the staff of the Federal Reserve Board introduced a new set of indexes of the foreign exchange value of the U.S. dollar.1 The staff made the changeover, from indexes that had been used since the late 1970s, for two reasons. First, five of the ten currencies in the staff’s previous main index of the dollar’s foreign exchange value were about to be replaced by a single new cur...

Abstract-Foreign exchange market is the largest and the most important one in the world. Foreign exchange transaction is the simultaneous selling of one currency and buying of another currency. It is essential for currency trading in the international market. In this paper, we have investigated Artificial Neural Networks based prediction modelling of foreign exchange rates using five different ...