This paper provides novel evidence on exchange rate expectations of both chartists and fundamentalists
separately. These groups indeed form expectations differently. Chartists change
their expectations more often; however, all professionals' expectations vary considerably as they
generally follow strong exchange rate trends. In line with non-linear exchange rate-modeling,
professionals expect mean reversion only if exchange rates deviate much from PPP. Chartists
survive in FX markets as they forecast equally accurately as fundamentalists. Unexpected
from an effcient market viewpoint, chartists even outperform fundamentalists at short horizons.
Overall, these findings clearly support the chartist-fundamentalist approach.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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