I am interested in where the data of supply and demand is taken from to calculate any given exchange rate, and who actually uses that data to calculate the official exchange rate?
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DislikedI am interested in where the data of supply and demand is taken from to calculate any given exchange rate, and who actually uses that data to calculate the official exchange rate?Ignored
DislikedSo your saying that its only the buyers and sellers in the fx market who determine the exchange rate of a currency?Ignored
DislikedSo your saying that its only the buyers and sellers in the fx market who determine the exchange rate of a currency? Because there is obviously a lot of money outside the fx market changing hands at any point in time. A good example is the amount of money being printed by the fed. Thats increasing supply exproportionately and is completely outside the fx market. Of course you can expect such a fundamental to work its way into the fx market through pressure on short selling due to investors trying to capture profit, but even with that its hard to...Ignored
Disliked"Birdt"
Thanks for the answer. You say,
"any discrepancies between the exchange rate and the expectation of future value will be filled by profit seeking speculators."
"a market instrument will often lead a different life to the physical reality of a nation, stock, commodity etc."
"attempting to derive a value from the economic components is flawed in my opinion."
I agree Birdt that economic data is priced in before releases. Data releases and forecasts are both more than likely flawed also because of the difficulty in producing accurate...Ignored