TY  - JOUR
AU  - Dominguez,Kathryn M.E.
AU  - Panthaki,Freyan
TI  - The Influence of Actual and Unrequited Interventions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12953
PY  - 2007
Y2  - March 2007
UR  - http://www.nber.org/papers/w12953
L1  - http://www.nber.org/papers/w12953.pdf
N1  - Author contact info:
Kathryn M.E. Dominguez
University of Michigan
Department of Economics and Ford School
Weill Hall
735 South State Street
Ann Arbor, MI 48109
Tel: 734-764-9498
Fax: 734-763-9181
E-Mail: kathrynd@umich.edu

Freyan Panthaki
Financial Markets Group
London School of Economics
Houghton Street
London WC2A 2AE
United Kingdom
E-Mail: freyanp@hotmail.com
AB  - Intervention operations are used by governments to manage their exchange rates but officials rarely confirm their presence in the market, leading inevitably to erroneous reports in the financial press.  There are also reports of what we term, unrequited interventions, interventions that the market expects but do not materialize. In this paper we examine the effects of various types of intervention news on intra-day exchange rate behavior. We find that unrequited interventions have a statistically significant influence on returns, volatility and order flow, suggesting that the expectation of intervention, even when governments do not intervene, can affect currency values.
ER  -