Forecasting the exchange rate of currencies. A panel data approach


Term Paper, 2015

9 Pages, Grade: A


Abstract or Introduction

The exchange rate on a daily basis is an indispensable factor in the foreign exchange market as well as in international trade. Many traders make a profit based on the pip in the foreign exchange market. Moreover, inflation and deflation of a currency against another currency is the root of making a profit in the foreign exchange market. Even in the international trade many individual traders and multi-national corporations always carefully observes the fluctuation of the exchange rate in order to determine the exchange rate efficiently and accurately.

Because the more accurate the forecasted exchange rate is, the higher the chance becomes to make a profit only by investing a little amount of money in the foreign exchange market. The exchange rate has also significant impact on the export, import, foreign direct investment etc.

This paper pursues the goal to explain how an individual or an organization can formulate future exchange rate of any currency in an efficient and time effective way. To meet this demand, this paper utilizes the help of panel data and a regression model. As a sample, this paper considers USD/BDT for a forecast. It must be noted that, with different panel data of different currencies, the method will remain same if anyone wants to forecast exchange rates of different currencies.

Details

Title
Forecasting the exchange rate of currencies. A panel data approach
Course
International Financial Management
Grade
A
Author
Year
2015
Pages
9
Catalog Number
V351362
ISBN (eBook)
9783668380653
ISBN (Book)
9783668380660
File size
495 KB
Language
English
Keywords
International Finance, Foreign Exchange rate, Panel Data Appoarch, Regression Model, International Financial Management
Quote paper
Sajjad Hossine Sharif (Author), 2015, Forecasting the exchange rate of currencies. A panel data approach, Munich, GRIN Verlag, https://www.grin.com/document/351362

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