The currency rates are not a random walk (it’s easy to verify that emprirically) either before or after adjusting for the interest rate parity.
What makes currency markets different is that they have huge powerful players—central banks—which are not driven by the profit motive.
The currency rates are not a random walk (it’s easy to verify that emprirically) either before or after adjusting for the interest rate parity.
What makes currency markets different is that they have huge powerful players—central banks—which are not driven by the profit motive.