Many entities have an interest in being able to forecast the direction of exchange rates. Whether you are a business or a trader, having an exchange rate forecast to guide your decision making can be very important to minimize risks and maximize returns …

Many companies have a need for foreign exchange forecasts. This need can range from the very short-term, especially if the company runs a large dealing room, to the relatively long-term, if it needs to hedge a major capital project. Because they are predictions of future events, forecasts are developed in different ways …

Feb 13, 2015 – Random Walks, PPP And Forecasting Foreign Exchange Rates. An interesting paper making the point that you can too forecast foreign exchange rates. … A long standing result of the academic literature is that exchange rates are not predictable as macroeconomic models cannot generally beat the random walk.

Instead the foreign exchange market operates through a huge electronic network of banks, corporations and individuals trading one currency for another. When entering the Forex market, it's better to come prepared – and that's when Forex forecasting comes into play.

This chapteryzes and evaluates the different methods used to forecast exchange rates. This chapter closes with a discussion of exchange rate volatility. I. Forecasting Exchange Rates. International transactions are usually settled in the near future. Exchange rate forecasts are necessary to evaluate the foreign …