This paper sheds new light on a long-standing puzzle in the international finance literature, namely, that exchange rate expectations appear inaccurate and even irrational. We find for a comprehensive dataset that individual forecasters’ performance is skill-based. ‘Superior’ forecasters...

IThis paper sheds new light on a long-standing puzzle in the international finance literature, namely, that exchange rate expectations appear inaccurate and even irrational. We find for a comprehensive dataset that individual forecasters’ performance is skill-based. ‘Superior’ fore-casters...

Is it common for central banks to intervene in foreign exchange markets in order to influence exchange rates? And if so, is it effective? From a German perspective, these questions seem surprising, since the European Central Bank (ECB) does not intervene in foreign exchange markets-rather, it...