Regarding short-range exchange rate movements,which of the following statements is NOT true?
A) they may vary from week to week
B) they may vary from hour to hour
C) are similar to those of the transaction demand determinants of long-term trends in exchange rates
D) determined by arbitrage activity
E) both a and b are false

Question

Regarding short-range exchange rate movements,which of the following statements is NOT true?
A) they ​may vary from week to week
B) ​they may vary from hour to hour
C) ​are similar to those of the transaction demand determinants of long-term trends in exchange rates
D) determined by arbitrage activity
E) ​both a and b are false

Quizplus · Accepted Answer

Short-range exchange rate movements are typically influenced by factors such as economic data releases, geopolitical events, and market sentiment, whereas long-term trends are influenced by factors such as interest rates, inflation, and current account balances. Therefore, short-range exchange rate movements are not similar to the transaction demand determinants of long-term trends in exchange rates.

Regarding Short-Range Exchange Rate Movements,which of the Following Statements Is