According to the efficient market view, the best predictor of exchange rates is ________.

Question

Quizplus · Accepted Answer

According to the efficient market view, all available and relevant information is already reflected in the current exchange rate. Therefore, future exchange rates cannot be predicted using fundamental analysis, technical analysis or statistical modeling. However, forward exchange rates, which are based on the current exchange rate and interest rate differentials between currencies, may provide some insight into the market's expectation of future exchange rate movements.

According to the Efficient Market View, the Best Predictor of Exchange