RISING TO THE CHALLENGE
Central bankers and finance ministers have emerged from their free
market bunkers during the past 18 months to fight forex dealers and
speculators with all the weapons they can muster. And despite emerging
doubts about the viability of joint action to manage exchange rates,
there will not be a return to the old order.
Forex advisory services have reacted to these developments with a
mixture of satisfaction, scepticism and, in some cases, disinterest. But
the analysts who make their living by advising clients about buying,
selling and hedging currencies are unanimous in their belief that it is
still difficult to forecast exchange rates and insist that they have a
valuable role to play. The convergence of economic policies, the move
to coordinated forex market intervention and the prospect of target
zones for exchange rates are helpful elements in the forecasting
equation, but getting the answer right remains a major challenge.
...
