Currency Strategy 2e

ISBN-13: 9780470027592 / Angielski / Twarda / 2006 / 264 str.

Callum Henderson

Opis

Currency Strategy, Second Edition develops new techniques and explains classic tools available for predicting, managing, and optimizing fluctuations in the currency markets. Author Callum Henderson shows readers ho to use mathematical models to assist in the prediction of crises and gives practical advice on how to use these and other tools successfully. Given there such huge focus on China at the moment, the timing of this new edition is particularly important. The new edition will feature a thorough update on the key developments in the past 3 years, new chapters on emerging markets, an in-depth review of the markets of China and India and their currencies and much more.

Spis treści

Preface to the Second Edition.

Acknowledgements.

About the Author.

Introduction.

PART ONE: THEORY AND PRACTICE.

1 Fundamental Analysis: The Strengths and Weaknesses of Traditional Exchange Rate Models.

1.1 Purchasing Power Parity.

1.2 The Monetary Approach.

1.3 The Interest Rate Approach.

1.4 The Balance of Payments Approach.

1.5 The Portfolio Balance Approach.

1.6 Summary.

2 Currency Economics: A More Focused Framework.

2.1 Currencies are Different.

2.2 Currency Economics.

2.3 Summary.

3 Flow: Tracking the Animal Spirits.

3.1 Some Examples of Flow Models.

3.2 Speculative and Non–Speculative Flows.

3.3 Summary.

4 Technical Analysis: The Art of Charting.

4.1 Origins and Basic Concepts.

4.2 The Challenge of Technical Analysis.

4.3 The Art of Charting.

4.4 Schools of (Technical) Thought.

4.5 Technical Analysis and Currency Market Practitioners.

PART TWO: REGIMES AND CRISES.

5 Exchange Rate Regimes: Fixed or Floating?

5.1 An Emerging World.

5.2 A Brief History of Emerging Market Exchange Rates.

5.3 Fixed and Pegged Exchange Rate Regimes.

5.4 Exchange Rate Regime Sustainability – A Bi–Polar World?

5.5 The Realworld Relevance of the Exchange Rate Regime.

5.6 Summary.

6 Model Analysis: Can Currency Crises be Predicted?

6.1 A Model for Pegged Exchange Rates.

6.2 A Model for Freely Floating Exchange Rates.

6.3 Summary.

PART THREE: THE REAL WORLD OF THE CURRENCY MARKET PRACTITIONER.

7 Managing Currency Risk I – The Corporation: Advanced Approaches to Corporate Treasury FX Strategy.

7.1 Currency Risk.

7.2 Types of Currency Risk.

7.3 Managing Currency Risk.

7.4 Measuring Currency Risk – VaR and Beyond.

7.5 Core Principles for Managing Currency Risk.

7.6 Hedging – Management Reluctance and Internal Methods.

7.7 Key Operational Controls for Treasury.

7.8 Tools for Managing Currency Risk.

7.9 Hedging Strategies.

7.10 Optimization.

7.11 Hedging Emerging Market Currency Risk.

7.12 Benchmarks for Currency Risk Management.

7.13 Budget Rates.

7.14 The Corporation and Predicting Exchange Rates.

7.15 Summary.

8 Managing Currency Risk II – The Investor: Currency Exposure within the Investment Decision.

8.1 Investors and Currency Risk.

8.2 Currency Markets are Different.

8.3 To Hedge or not to Hedge – That is the Question!

8.4 Absolute Returns – Risk Reduction.

8.5 Selecting the Currency Hedging Benchmark.

8.6 Relative Returns – Adding Alpha.

8.7 Examples of Active Currency Management Strategies.

8.8 Emerging Markets and Currency Hedging.

8.9 Summary.

9 Managing Currency Risk III – The Speculator: Myths, Realities and How to be a Better Currency Speculator.

9.1 The Speculator – From Benign to Malign.

9.2 Size Matters.

9.3 Myths and Realities.

9.4 The Speculators – Who they are.

9.5 The Speculators – Why They Do It.

9.6 The Speculators – What They Do.

9.7 Currency Speculation – A Guide.

9.8 Summary.

10 Applying the Framework.

10.1 Currency Economics.

10.2 Flow Analysis.

10.3 Technical Analysis.

10.4 Long–Term Valuation.

10.5 The Signal Grid.

10.6 Risk Appetite Indicators.

10.7 Exchange Rate Regimes.

10.8 Currency Crises and Models.

10.9 Managing Currency Risk I – The Corporation.

10.10 Managing Currency Risk II – The Investor.

10.11 Managing Currency Risk III – The Speculator.

10.12 Currency Strategy for Currency Market Practitioners.

10.13 Summary.

11 EmergingWorld: New Growth Markets for Global FX.

11.1 The Growth of Emerging Markets as an Asset Class.

11.2 Increasing Importance of EM Currencies.

11.3 Explosive Growth in Asian Currencies.

11.4 Asian NDF Markets: Growth and Liberalization.

11.5 Emerging European Currencies.

11.6 Latin American Currencies.

11.7 Summary.

Conclusion.

Index.

O autorze

CALLUM HENDERSON is Head of FX Strategy for a leading international bank, based in Singapore. A wide–quoted authority of both emerging and currency markets, Mr Henderson has spent the past 16 years in the financial markets in various capacities and has written articles for many leading financial journals and given seminars around the world on global currency markets.
Mr Henderson is the author of three previous books covering the Asian economic story: the bestseller Asia Falling, China on the Brink (awarded Best Business Book of 1999 by the Library Journal of the US) and Asian Dawn.

Blurb

Following the success of the first edition, this second edition includes important new material: a Preface to the Second Edition, additional sections for Chapters 7, 8 and 9 on the Real World of the Currency Market Practitioner, and a new Chapter 11 – Emerging World: New Growth Markets for Global FX.

The global foreign exchange market continues to go from strength to strength, defying those who predicted its demise after the launch of the Euro. However, within this, new Emerging Markets show the greatest potential for growth. This second edition examines in detail the very latest trends in this field, providing important insights for currency market practitioners on regions such as Asia, which may hold the key to the market’s development in years to come.

John Maynard Keynes’ reference to the ‘animal spirits’, that elemental force which drives financial markets in herd–like fashion, was applied to the stock market. However, he might as well have been referring to the currency market, for the term sums up no other more perfectly. A market that is volatile and unpredictable, a market that epitomizes such a concept as the ‘animal spirits’, surely requires a very specific discipline by which to study it.

This is precisely what Callum Henderson does in this eminently practical and readable book. He provides an analytical framework for currency analysis and forecasting, combining long–term economic valuation models with market–based valuation techniques to produce a more accurate and use–friendly analytical tool for the currency market practitioners themselves.