Forex contracts involve the right to buy or sell a certain amount of a foreign currency at a fixed price in U. It is extremely rare that individual traders actually see the foreign currency.
The authors suggest a new hybrid neural network which is a combination of the standard RBF neural network, a genetic algorithm, and a moving average.
The moving average is supposed to enhance the outputs of the network using the error part of the original neural network.
Authors test the suggested model on high-frequency time series data of USD/CAD and examine the ability to forecast exchange rate values for the horizon of one day.
To determine the forecasting efficiency, they perform a comparative statistical out-of-sample analysis of the tested model with autoregressive models and the standard neural network.
In order to determine which is the fixed currency when neither currency is on the above list (i.e.
both are "other"), market convention is to use the fixed currency which gives an exchange rate greater than 1.000.
Individual traders comprise a very small part of this market.
Because of the volatility in the price of foreign currency, losses can accrue very rapidly, wiping out an investor’s down payment in short order.
Even if a company expects to be paid in its own currency, it must assess the risk that the buyer may not be able to pay the full amount due to currency fluctuations.
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This report provides exchange rate information under Section 613 of Public Law 87-195 dated September 4, 1961 ( (b)) which gives the Secretary of the Treasury sole authority to establish the exchange rates for all foreign currencies or credits reported by all agencies of the government. The rates provided in this report are not meant to be used by the general public for conducting foreign currency conversion transactions.