Research Discussion Papers, Bank of Finland
No 10/2006:
Fundamentals and technical trading: behaviour of exchange rates in the CEECs
Mikael Bask ()
and Jarko Fidrmuc ()
Abstract: We present a model of exchange rates, which incorporates
the monetary approach and technical trading, and we present the reduced
form based on the minimal state variable solution, where both fundamentals
and backward-looking term determine the spot exchange rates. Finally, we
estimate the impact of the monetary fundamentals for a panel of Central and
Eastern European countries (Czech Republic, Poland, Romania and Slovakia)
in the second half of the 1990s as well as the complete model of exchange
rate determination for daily data over the more recent free-floating
period.
Keywords: foreign exchange market; fundamental analysis; panel cointegration; technical analysis; (follow links to similar papers)
JEL-Codes: C23; F31; F36; (follow links to similar papers)
24 pages, June 12, 2006
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