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What Determines FX Rates? - SNBCHF.COM

What Determines FX Rates? - SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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 in economic growth, and more.
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Purchasing Power Parity -SNBCHF.COM

Purchasing Power Parity -SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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.
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Inflation, Central Banks and Interest Rates -SNBCHF.COM

Inflation, Central Banks and Interest Rates -SNBCHF.COM | Foreign Exchange Theory | Scoop.it
In this chapter we connect three related concepts: inflation, central banks and interest rates.
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FX Theory: Wealth and International Investment Position -SNBCHF.COM

FX Theory: Wealth and International Investment Position -SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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The Main FX Trading Strategies - SNBCHF.COM

The Main FX Trading Strategies - SNBCHF.COM | Foreign Exchange Theory | Scoop.it
Carry Trades, Central Bank Interventions, Fundamental Data, mean reversion, Momentum Trades, Overshooting, trend following
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The Real Mean Reversion for Currencies

The Real Mean Reversion for Currencies | Foreign Exchange Theory | Scoop.it
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".
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FX Theory: Interest Rate Parity - SNBCHF.COM

FX Theory: Interest Rate Parity - SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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Currency Wars: How to Push and Talk Down Your Currency? -SNBCHF.COM

Currency Wars: How to Push and Talk Down Your Currency? -SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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.
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FX Theory: Understand Terms of Trade and Price-Adjusted Trade Balances - SNBCHF.COM

FX Theory: Understand Terms of Trade and Price-Adjusted Trade Balances - SNBCHF.COM | Foreign Exchange Theory | Scoop.it
  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 exports and imports increase.
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Explaining price movements in FX rates

Explaining price movements in FX rates | Foreign Exchange Theory | Scoop.it
We indicate the main factors that influence FX rates in the longer term. We explain the movements of currencies based on these factors.
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Real Effective Exchange Rate, Swiss Franc, Yen and Renmimbi

Real Effective Exchange Rate, Swiss Franc, Yen and Renmimbi | Foreign Exchange Theory | Scoop.it
The weighted average of country's currency relative to index or basket of other major currencies adjusted for inflation.
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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.
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FX Theory: Balance of Payments Model -SNBCHF.COM

FX Theory: Balance of Payments Model -SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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,
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The Asset Market Model -SNBCHF.COM

The Asset Market Model -SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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 increase.
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The Holy Grail of Long-Term Currency Movements: Crowther's Balances and Imbalances of Payments

The Holy Grail of Long-Term Currency Movements: Crowther's Balances and Imbalances of Payments | Foreign Exchange Theory | Scoop.it
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 phase...
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FX Theory: Currencies of Countries with High Economic Freedom, Immigration and Savings Must Appreciate

FX Theory: Currencies of Countries with High Economic Freedom, Immigration and Savings Must Appreciate | Foreign Exchange Theory | Scoop.it
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 Europe.
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FX Theory: The relationship between Current Accounts Surpluses and the Carry Trade - SNBCHF.COM

FX Theory: The relationship between Current Accounts Surpluses and the Carry Trade - SNBCHF.COM | Foreign Exchange Theory | Scoop.it
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?
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Ricardo's Comparative Cost Theory, Heckscher-Ohlin Model and the Product Lifecycle Theory

Ricardo's Comparative Cost Theory, Heckscher-Ohlin Model and the Product Lifecycle Theory | Foreign Exchange Theory | Scoop.it
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