OVERSHOOTING
A phenomenon in economics used to explain why exchange rates are more volatile than would be expected. Some economists had argued that volatility was purely the result of speculators and inefficiencies in the foreign exchange market. However, the overshooting model argues that the foreign exchange rate will temporarily overreact to changes in monetary policy to compensate for sticky prices in the economy. Thus, there will be more volatility in the exchange rate due to overshooting and subsequent corrections that would otherwise be expected.
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ECONOMIC CALENDAR
Time | Country | Indices | Period |
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08:30 | Producer & Import Prices | Mar | |
11:00 | Industrial Production | Feb | |
14:30 | Manufacturing Shipments | Feb | |
14:30 | Wholesale Sales | Feb | |
14:30 | Retail Sales | Mar | |
14:30 | NY Fed Empire State manufacturing index | Apr | |
16:00 | Business Inventories | Feb | |
16:00 | NAHB Housing Market Index | Apr | |
04:00 | Real GDP | 1 quarter |