This study uses two-way quoted data on major and nonmajor currencies to test the exchange rate dynamics. Particular attention is paid to the arbitrage and the spread in triangular foreign exchange trades. There is only one possible triangle when a bilateral exchange rate equals its trilateral...

Focusing on the recent experience of major and minor currencies, this study examines the effectiveness of constant hedge and speculative hedge respectively with the objective of identifying whether there are any significant differences between both hedges. Our finding is that the speculative...