Currency

About: Currency is a research topic. Over the lifetime, 26697 publications have been published within this topic receiving 485370 citations. The topic is also known as: monetary unit & unit of money.

Currency exchange rate forecasting from news headlines

Abstract: We investigate how money market news headlines can be used to forecast intraday currency exchange rate movements The innovation of the approach is that, unlike analysis based on quantifiable information, the forecasts are produced from text describing the current status of world financial markets, as well as political and general economic news In contrast to numeric time series data textual data contains not only the effect (eg, the dollar rises against the Deutschmark) but also the possible causes of the event (eg, because of a weak German bond market) Hence improved predictions are expected from this richer input The output is a categorical forecast about currency exchange rates: the dollar moves up, remains steady or goes down within the next one, two or three hours respectively On a publicly available commercial data set the system produces results that are significantly better than random prediction The contribution of this research is the smart modeling of the prediction problem enabling the use of content rich text for forecasting purposes

Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism : Second Edition and Supplement on Special Recommendation IX

Abstract: Efforts to launder money and finance terrorism have been evolving rapidly in recent years in response to heightened counter measures. The international community has witnessed the use of increasingly sophisticated methods to move illicit funds through financial systems across the globe and has acknowledged the need for improved multilateral cooperation to fight these criminal activities. This second edition is to serve as a single, comprehensive source of practical information for countries to fight money laundering and terrorist financing. It discusses the problems caused by these crimes, the specific actions countries need to take to address them and the role international organizations play in the process. The report is organized as follows: Part A of this Reference Guide describes the problem of money laundering and terrorist financing, their adverse consequences, and the benefits of an effective regime. It also identifies the relevant international standard-setting organizations and discusses their specific efforts and instruments that fight these activities. Part B describes the various elements that are part of a comprehensive legal and institutional framework for anti-money laundering and combating the financing of terrorism for any country. This part of the Reference Guide is a step-by-step approach to achieve compliance with international standards, although it does not dictate the specific methods or actions to be adopted. Rather, it raises the issues that must be addressed and discusses the options that a country has in order to resolve these issues. Part C describes the role of the World Bank and International Monetary Fund (IMF) in the global effort and the coordination of technical assistance available to countries in order to help them achieve compliance with international standards. Each chapter is a self-contained discussion of the topics covered in that chapter with detailed references to background and original source materials. Annexes I, II and III provide complete citations to reference materials.

Negative Alchemy? Corruption, Composition of Capital Flows, and Currency Crises

Abstract: Crony capitalism and self-fulfilling expectations by international creditors are often suggested as two rival explanations for currency crisis. This paper examines a possible linkage between the two that has not been explored much in the literature: corruption may affect a country's composition of capital inflows in a way that makes it more likely to experience a currency crisis that is triggered/aided by a sudden reversal of international capital flows. We find robust evidence that poor public governance is associated with a higher loan-to-FDI ratio. Such a composition of capital flows has been identified as being associated with a higher incidence of a currency crisis. We also find some weaker evidence that poor public governance is associated with a country's inability to borrow internationally in its own currency. The latter is also associated with a higher incidence of a currency crisis. To sum up, even though crony capitalism does not forecast the timing of a crisis, it can nevertheless increase its likelihood. This paper illustrates a particular channel through which this can happen.

The Association between SFAS No. 119 Derivatives Disclosures and the Foreign Exchange Risk Exposure of Manufacturing Firms

Abstract: This study investigates whether the quantitative disclosures about notional amount and fair value of foreign exchange derivatives, required by Statement of Financial Accounting Standards (SFAS) No. 119 and its predecessors are associated with the information used by investors to assess the sensitivity of equity returns to currency fluctuations (currency exposure). I derive the underlying relations of currency risk exposure to notional amount and to fair value disclosures, applying the "delta" risk measure for derivative securities. The analysis shows that derivatives disclosures are potentially useful. I test the hypotheses using the Fortune 500 manufacturing firms over the period 1994-1996. First, I test for an association between currency exposure and derivatives disclosures. Second, I test whether current period derivatives disclosures help predict currency exposures in future periods. The results are mixed and only weakly consistent with my predictions. In particular, the evidence suggests that neither aggregated nor disaggregated fair value disclosures complement notional amount in assessing currency risk exposure. This study has three implications for increasing the usefulness of derivatives disclosures. First, improving disclosures about firms' inherent business risks will increase the usefulness of derivatives disclosures by providing information about the risks being managed with derivatives. Second, disaggregation of notional amount and fair value information by long and short positions taken, major currency, class of instrument, time to maturity, and leverage would allow users of financial statements to perform a complete exposure assessment. Third, separate disclosure of foreign exchange gains and losses on derivative instruments and the items being hedged will facilitate exposure assessment.