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Interest-rate shocks and currency moves
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CT-October 2007-5
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Pay attention: The currency moves triggered by big interest-rate changes aren't mirages.
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Detailed Description
Last months article (" Stock shocks and the dollar," Currency Trader, September 2007) examined how currencies react to shocks in U.S. equities. As is often the case in scientific inquiries, this study raised other questions. After all, if currencies react to short-term interest-rate changes and therefore, expectations, we should expect to see some very statistically significant reactions to extreme moves in short-term interest rates.
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