Predictability of Foreign Exchange Rates Dissertation

Predictability of Foreign Exchange Rates - Dissertation Example I am also much obliged to my supervisors who guided me with their timely advice, feedbacks and suggestions which aided me in attaining the expected standard of work and keeping me punctual as per the scheduled deliveries of dissertation chapters. Table of Contents Serial no. Topic Page no. I Introduction, Aims & objectives and Research Questions 6 I.1 Introduction 6 I.2 Aims 6 I.3 Objectives 6 I.4 Research Questions 7 II Literature Review 8 III Research Methodology 15 IV Findings Analysis and Discussion 19 V Conclusion and Recommendations for future Research 33 VI References 40 List of Tables Table no. Topic Page no. 1a Regression Results of Equation (1a) 22 1b Regression Results of Equation (1b) 23 2a Regression Results of Equation (2a) 25 2b Regression Results of Equation (2b) 26 3a Regression Results of Equation (3a) 28 3b Regression Results of Equation (3b) 29 List of Tables in Appendix Serial no. Topic Page no. ... on: The collapse of the Bretton Woods System of fixed exchange rate in 1978 ushered in the new era of flexible exchange rate that aimed for the betterment of trade relations between countries. Free and floating exchange rate were assumed to be the solution to the barriers to free trade and hence, the newly acquired ideals of globalization. What remained uncalculated was the instability and lack of predictability associated with flexible exchange rates. In the aftermath of the Global Crisis of 2007, the predictability of exchange rates has evolved as one of the most relevant issues and pleads minute scrutiny and analysis. I.2 Aims: The objective of this research is to examine the depreciations, appreciations and devaluations in the value of the US Dollar relative to other major currencies and based on this analysis; draw a general conclusion on the degree of predictability of exchange rates in recent times. Furthermore, it attempts to identify the main factors responsible for the vola tility of exchange rates following the collapse of the Bretton Woods System and thus, offer a clear insight into the various mechanisms existent in the context of exchange rate predictability. I.3 Objectives: The main objectives of the research are: To compare the differences in the stability and predictability of exchange rates before and after the collapse of the Bretton Woods System of fixed Exchange rates. To study the variations in the value of exchange rate of US, with respect to other major currencies and based on this, gauge the relative increase or decrease in the stability and predictability of exchange rates. To identify the reasons for the changing degree of predictability in exchange rates. To study the implications of the varying degrees of predictability of exchange rates, in