The Deutsche Bank Guide to Exchange-Rate Determination

Introduction  4
Exchange Rate Determination in the Short Run  7
Currency Forecasting Using Technical Analysis  11
Sentiment and Positioning Indicators  21
Currency Options Market  22
Order Flow and the Determination of Exchange Rates  24
Investor Positioning and the Trend in Exchange Rates  27
Risk Appetite Shifts and Currency Trends  28
Exchange Rate Determination in the Long Run  31
Purchasing Power Parity  33
The Macroeconomic-Balance Approach to Long-Run
Exchange-Rate Determination  42
The Real Long-Run Equilibrium Exchange Rate  43
Productivity Trends and Exchange Rates  46
Terms of Trade and Exchange Rates  50
Net International Investment and the Equilibrium Exchange Rate  51
Long-Term Cycles in Exchange Rates  53
Overshooting Exchange Rates  60
Exchange Rate Determination in the Medium Run  63
International Parity Conditions  65
Real Interest-Rate Differential Model  67
Forward-Rate Bias Strategy  72
Current-Account Imbalances and the Determination of
Exchange Rates  77
Capital Flows and Exchange Rates  86
Mundell-Fleming Model  96
Monetary Approach  104
Portfolio-Balance Approach  108
Fiscal Policy  115
Economic Growth  119
Central-Bank Intervention  124
Anticipating Currency Crises in Emerging Markets  129
References  155