Currency speculation and dollar fluctuations
In this study the reasons behind the wide fluctuations of the dollar exchange rate following the breakdown of the Bretton Woods system, for the most part unexplained by the prevailing exchange rate theories, are explored. To do so, the author investigates the exchange rate between the two most trade...
Main Author: | |
---|---|
Format: | Article |
Language: | English |
Published: |
Associazione Economia civile
1988-12-01
|
Series: | PSL Quarterly Review |
Subjects: | |
Online Access: | http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10362/10265 |
id |
doaj-440c2e2ade1848d8a578c1ef86ae73a7 |
---|---|
record_format |
Article |
spelling |
doaj-440c2e2ade1848d8a578c1ef86ae73a72020-11-24T22:38:14ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36431988-12-0141167343365Currency speculation and dollar fluctuationsStephan SchulmeisterIn this study the reasons behind the wide fluctuations of the dollar exchange rate following the breakdown of the Bretton Woods system, for the most part unexplained by the prevailing exchange rate theories, are explored. To do so, the author investigates the exchange rate between the two most traded currencies, the dollar and the deutschemark, from 1973 to 1988. In the first part, the pattern of the daily exchange rate movements is examined to show that a sequence of upward and downward trends interrupted by non-directional movements is typical of exchange rate dynamics in the short run. Moreover, this pattern is systemically exploited through currency speculation, particularly through the use of “technical analysis”. In the second part, the author focuses on the medium-term, arguing that fluctuations can be explained as the result of interacting disequilibria in the goods and asset markets. Although currency speculation has been systemically profitable for most currencies, it should be considered to be destabilizing since the sequence of price runs caused large and persistent deviations of exchange rates from their equilibrium values (purchasing power parity).http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10362/10265Currency speculationdollar fluctuations |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Stephan Schulmeister |
spellingShingle |
Stephan Schulmeister Currency speculation and dollar fluctuations PSL Quarterly Review Currency speculation dollar fluctuations |
author_facet |
Stephan Schulmeister |
author_sort |
Stephan Schulmeister |
title |
Currency speculation and dollar fluctuations |
title_short |
Currency speculation and dollar fluctuations |
title_full |
Currency speculation and dollar fluctuations |
title_fullStr |
Currency speculation and dollar fluctuations |
title_full_unstemmed |
Currency speculation and dollar fluctuations |
title_sort |
currency speculation and dollar fluctuations |
publisher |
Associazione Economia civile |
series |
PSL Quarterly Review |
issn |
2037-3635 2037-3643 |
publishDate |
1988-12-01 |
description |
In this study the reasons behind the wide fluctuations of the dollar exchange rate following the breakdown of the Bretton Woods system, for the most part unexplained by the prevailing exchange rate theories, are explored. To do so, the author investigates the exchange rate between the two most traded currencies, the dollar and the deutschemark, from 1973 to 1988. In the first part, the pattern of the daily exchange rate movements is examined to show that a sequence of upward and downward trends interrupted by non-directional movements is typical of exchange rate dynamics in the short run. Moreover, this pattern is systemically exploited through currency speculation, particularly through the use of “technical analysis”. In the second part, the author focuses on the medium-term, arguing that fluctuations can be explained as the result of interacting disequilibria in the goods and asset markets. Although currency speculation has been systemically profitable for most currencies, it should be considered to be destabilizing since the sequence of price runs caused large and persistent deviations of exchange rates from their equilibrium values (purchasing power parity). |
topic |
Currency speculation dollar fluctuations |
url |
http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10362/10265 |
work_keys_str_mv |
AT stephanschulmeister currencyspeculationanddollarfluctuations |
_version_ |
1725714111882330112 |