Skip to content

4 Approaches to Forecasting Exchange Rates

December 17, 2017

PPP (or relative inflation rates) as exchange rate movements should offset inflation differentials.

Relative economic strength, because a strong pace of economic growth tends to attract investment.

Capital flows, as net inflows into a country, such as FDI, increase the demand for a country’s currency.

Savings-investment imbalances, through their ultimate effect on the need for foreign savings.

Advertisements

From → Economics

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: