Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
964391 | Journal of International Money and Finance | 2006 | 21 Pages |
Abstract
This paper examines dollar interventions by the G3 since 1989, and the reasons that trader reactions to these interventions might differ over time and across central banks. Market microstructure theory provides a framework for understanding the process by which sterilized central bank interventions are observed and interpreted by traders, and how this process, in turn, might influence exchange rates. Using intra-daily and daily exchange rate and intervention data, the paper analyzes the influence of interventions on exchange rate volatility, finding evidence of both within day and daily impact effects, but little evidence that interventions influence longer-term volatility.
Related Topics
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Authors
Kathryn M.E. Dominguez,