Re: GBP & US$
- From: John Boyle <john@xxxxxxxxxxxxxxxxxxxxxx>
- Date: Sun, 12 Aug 2007 00:46:09 +0100
In message <A8udnbGSK6EEoCPbnZ2dnUVZ8rOdnZ2d@xxxxxxxxxxxxxx>, Jonathan Bryce <jonathan@xxxxxxxxxxxxxxxxxxxxx> writes
Any known news about future movements in exchange rates is already factored
into the current rate, so speculation about future rate movements is
speculation about what future unknown news might say. If you speculate on
foreign currency, you have a 50:50 chance of making the right call, and it
will cost you money in transaction fees, and the fact that you probably
won't get such a good interest rate on your foreign currency holdings.
I agree with all that except for the 50:50 bit. I dont think we can calculate the chance. Whilst past data can be used to assess the historical chance, we cant calculate the forward chance because the outcome is not random.
--
John Boyle
.
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