To What Extent Can Forecasters “Out‐Predict” The Forward Markets: The Track Record of Forex Research Available to Purchase

With the introduction of a much more flexible exchange rate “system” in the 1970s, the need to predict currency movements has become an increasingly important preoccupation of the corporate treasury. At the same time, however, the task of making reasonable exchange rate predictions has become very much more difficult. Are the forecasting problems now insuperable? This paper presents the record of one of the major forecasting services, in its attempt to out‐predict or “beat” the forward rate over the period October 1975 to January 1978.