Intervention and the Bid-Ask Spread in G-3 Foreign Exchange Rates
Tests of the efficiency of foreign exchange markets continue to proliferate. Because these markets have become worldwide in scope and nonstop in operation, economists have been able to test many hypotheses about how information becomes incorporated into prices and transferred between markets in different locations. However, the finding that forward rates for foreign exchange are not unbiased predictors of future spot rates remains without a coherent explanation.
Suggested citation: Osterberg, William P. “Intervention and the Bid-Ask Spread in G-3 Foreign Exchange Rates,” Federal Reserve Bank of Cleveland, Economic Review, vol. 28, no. 2, pp. 02-23, 06.01.1992.