| Article ID: | iaor201522790 |
| Volume: | 7 |
| Issue: | 4 |
| Start Page Number: | 281 |
| End Page Number: | 290 |
| Publication Date: | Dec 1984 |
| Journal: | Journal of Financial Research |
| Authors: | Kaen Fred R, Simos Evangelos O, Hachey George A |
| Keywords: | finance & banking, investment |
This paper examines the effects of interest rate news on changes in forward foreign exchange rates. Virtually none of the errors in forecasting forward exchange rates are explained by interest rate forecasting errors. The results are consistent with a conjecture that the forward exchange rate is not an estimate of the expected spot exchange rate.