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foreign exchange

The pricing of foreign exchange and the unique role of US Dollar risk

by Brandon A. McBride, Research Associate, Cambridge Centre for Finance and Cambridge Endowment for Research in Finance Trading in over-the-counter foreign exchange (FX) markets reached $7.5 trillion per day in April 2022 across all FX instruments (BIS, 2022), making it…

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Visualisation of foreign exchange rates.

Voluminous breakthrough

Foreign exchange volume helps predict the following day's returns, finds study co-authored by Professor Lucio Sarno of Cambridge Judge Business School. Lucio Sarno The daily volume of foreign exchange (FX) trading helps predict returns on currency trading the next day,…

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Financial trader facing two computer monitors as she analyses the data and graphs in front of her.

The ‘carry’ trade

The carry strategy in foreign exchange markets generates positive average returns over the long run, but it can experience losses when there are shifts from fixed to floating currency regimes, finds a new study co-authored by Dr David Chambers of…

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If you’re so smart

John Maynard Keynes struggled as a foreign-exchange trader, finds the first detailed study of the famous economist as currency speculator. A detailed new study of the chequered currency-trading record of John Maynard Keynes might make today's overconfident currency speculators think…

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