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What Determines FX Rates? - SNBCHF.COM

The effects of so-called “currency wars” and other central bank actions are small compared to the long-term impact made by these five catalysts, which include credit cycles, trade balance, differences...

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Explaining price movements in FX rates

We indicate the main factors that influence FX rates in the longer term. We explain the movements of currencies based on these factors.See it on Scoop.it, via Foreign Exchange Theory

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FX Theory: Understand Terms of Trade and Price-Adjusted Trade Balances -...

  Exports and imports typically fluctuate with a rising or falling currency. When a currency appreciates then exports and imports fall when calculated in the local currency, and with a weaker currency...

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Currency Wars: How to Push and Talk Down Your Currency? -SNBCHF.COM

Direct or indirect intervention is credible only in countries where domestic asset prices are undervalued and CPI/asset price inflation are no issues. Otherwise they create medium-term risks.See it on...

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FX Theory: Currencies of Countries with High Economic Freedom, Immigration...

Economic freedom, immigration and high savings are main drivers for strong currencies. Switzerland, Singapore, Norway, Sweden and in the future even Germany are examples. Strangely most are in...

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FX Theory: Interest Rate Parity - SNBCHF.COM

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The Holy Grail of Long-Term Currency Movements: Crowther's Balances and...

former "The Economist" Geoffrey Crowther wrote on balance of payments development over time: Young debtor phase, mature debtor, debt repayment phase, young, then mature creditor, asset liquidator...

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The Real Mean Reversion for Currencies

We are of the strong opinion that an FX rate for certain countries does not matter in the long-term. The reason can be found in comparative cost theory and a so-called "Real Mean Reversion".See it on...

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The Asset Market Model -SNBCHF.COM

The Asset Market Model implies that a currency will be in higher demand and should appreciate in value, if the flow of funds into financial market of the country such as equity and bonds markets...

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The Main FX Trading Strategies - SNBCHF.COM

Carry Trades, Central Bank Interventions, Fundamental Data, mean reversion, Momentum Trades, Overshooting, trend followingSee it on Scoop.it, via Foreign Exchange Theory

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FX Theory: Wealth and International Investment Position -SNBCHF.COM

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FX Theory: Balance of Payments Model -SNBCHF.COM

The balance of payments model states that a currency valued based on balance of payments. The currency with a positive balance of payments must appreciate,See it on Scoop.it, via Foreign Exchange Theory

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FX Theory: Carry Trade and Reverse Carry Trade | SNB & CHF

This page discusses two closely related concepts: the carry trade and the reverse carry trade.See it on Scoop.it, via Foreign Exchange Theory

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Inflation, Central Banks and Interest Rates -SNBCHF.COM

In this chapter we connect three related concepts: inflation, central banks and interest rates.See it on Scoop.it, via Foreign Exchange Theory

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Real Effective Exchange Rate, Swiss Franc, Yen and Renmimbi

The weighted average of country's currency relative to index or basket of other major currencies adjusted for inflation.See it on Scoop.it, via Foreign Exchange Theory

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Purchasing Power Parity -SNBCHF.COM

An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.See it on...

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FX Theory: The relationship between Current Accounts Surpluses and the Carry...

The EUR/USD is going on its longest winning streak for a long time. Since May 27, it has improved from 1.2850 to 1.3396 and is approaching 1.34. What are the reasons?See it on Scoop.it, via Foreign...

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Ricardo's Comparative Cost Theory, Heckscher-Ohlin Model and the Product...

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