Chapter 8 - Exchange rate forecasting, technical analysis and trading rules. The objectives of this chapter are: To explain why exchange rate forecasting is needed, to illustrate forecasting techniques, to explain how to evaluate the performance of forecasters,. | Chapter 8 Exchange Rate Forecasting, Technical Analysis and Trading Rules Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Objectives To explain why exchange rate forecasting is needed To illustrate forecasting techniques To explain how to evaluate the performance of forecasters 8- (cont.) Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Objectives (cont.) To demonstrate how technical analysis is used to generate buy and sell signals To explain how filter rules and moving average rules work 8- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Definition Forecasting is a formal process of generating expectation Expectations are implicit forecasts 8- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Why do we need exchange rate forecasting? Spot speculation Uncovered interest arbitrage Spot-forward speculation Option speculation Hedging Investment and capital budgeting 8- (cont.) Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Why do we need exchange rate forecasting? (cont.) Financing decisions Pricing decisions Strategic planning Macroeconomic conditions Central bank intervention 8- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Econometric forecasting models These are models that are specified on the basis of economic theory and estimated by an econometric method They are classified into single-equation and multi-equation models . | Chapter 8 Exchange Rate Forecasting, Technical Analysis and Trading Rules Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Objectives To explain why exchange rate forecasting is needed To illustrate forecasting techniques To explain how to evaluate the performance of forecasters 8- (cont.) Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Objectives (cont.) To demonstrate how technical analysis is used to generate buy and sell signals To explain how filter rules and moving average rules work 8- Copyright 2010 McGraw-Hill Australia Pty Ltd PPTs t/a International Finance: An Analytical Approach 3e by Imad A. Moosa Slides prepared by Afaf Moosa Definition Forecasting is a formal process of generating expectation Expectations are implicit forecasts 8- Copyright 2010 .
