Foreign Exchange Fixings and Returns Around the Clock Staff Working Paper 2021-48 Ingomar Krohn, Philippe Mueller, Paul Whelan We document a new empirical finding in the foreign exchange market: currency returns show systematic reversals around the benchmark fixings. Specifically, the US dollar, on average, appreciates in the hours before fixes and depreciates after fixes. Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Financial markets, Market structure and pricing JEL Code(s): F, F3, F31, G, G1, G15
Tariffs and the Exchange Rate: Evidence from Twitter Staff Working Paper 2021-36 Dmitry Matveev, Francisco Ruge-Murcia Do tariffs affect exchange rates? We look at President Trump’s tweets during talks on the North American Free Trade Agreement and find that anticipation of higher tariffs on imports from Canada and Mexico led to an appreciation of the US dollar relative to Canadian and Mexican currency. Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Trade integration JEL Code(s): F, F1, F13, F3, F31
October 1, 2020 Background information on foreign exchange rates Learn about the publication of, and calculation methodology for, the foreign exchange (FX) rate data on the Bank of Canada’s website. Content Type(s): Background materials Topic(s): Exchange rates
August 13, 2020 Understanding exchange rates The foreign exchange market determines how much the Canadian dollar is worth. At the Bank of Canada, we very rarely intervene to support its value. Content Type(s): Explainers Topic(s): Exchange rates
Trade Flows and Exchange Rates: Importers, Exporters and Products Staff Working Paper 2019-41 Michael Devereux, Wei Dong, Ben Tomlin Using highly disaggregated transaction-level trade data, we document the importance of new firm-level trade partner relationships and the addition of new products to existing relationships in driving aggregate trade flows. Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Firm dynamics, International topics JEL Code(s): F, F1, F4
Exchange Rates, Retailers, and Importing: Theory and Firm-Level Evidence Staff Working Paper 2019-34 Alex Chernoff, Patrick Alexander We develop a model with firm heterogeneity in importing and cross-border shopping among consumers. Exchange-rate appreciations lower the cost of imported goods, but also lead to more cross-border shopping; hence, the net impact on aggregate retail prices and sales is ambiguous. Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, International topics, Service sector JEL Code(s): F, F1, F10, F14, L, L8, L81
June 17, 2019 Flexible Exchange Rates, Commodity Prices and Price Stability Remarks Lawrence L. Schembri Economics Society of Northern Alberta (ESNA) Edmonton, Alberta Deputy Governor Lawrence Schembri speaks before the Economics Society of Northern Alberta (ESNA). Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Exchange rate regimes, Exchange rates, Financial markets, Inflation targets, Monetary policy framework
June 17, 2019 The merits of a floating exchange rate Speech summary Lawrence L. Schembri Economics Society of Northern Alberta (ESNA) Edmonton, Alberta Deputy Governor Lawrence Schembri explains how Canada’s monetary policy framework—inflation targeting underpinned by a flexible exchange rate—has proved to be the most durable in the post-war period. Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Exchange rate regimes, Exchange rates, Financial markets, Inflation targets, Monetary policy framework
Entrepreneurial Incentives and the Role of Initial Coin Offerings Staff Working Paper 2019-18 Rodney J. Garratt, Maarten van Oordt Initial coin offerings (ICOs) are a new mode of financing start-ups that saw an explosion in popularity in 2017 but declined in popularity in the second half of 2018 as regulatory pressure, instances of fraud and reports of poor performance began to undermine their reputation. Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Exchange rates JEL Code(s): G, G3, G32
Estimating the Effect of Exchange Rate Changes on Total Exports Staff Working Paper 2019-17 Thierry Mayer, Walter Steingress This paper shows that real effective exchange rate (REER) regressions, the standard approach for estimating the response of aggregate exports to exchange rate changes, imply biased estimates of the underlying elasticities. We provide a new aggregate regression specification that is consistent with bilateral trade flows micro-founded by the gravity equation. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Exchange rates, International topics JEL Code(s): F, F1, F11, F12, F3, F31, F32