Interesting paper paper by Embrechts and Dias.

 

We analyze the conditional copula for two dimensional high-frequency data and find evidence of non-constancy over tme. We investigate at six different frequencies. Further, we investigate the existence of change-points in the conditional copula. The data analyzed are foreign exchange spot rates for USD against both EUR and JPY.

(Source: D. Terdiman, Wired) Kenneth Michael Merrill is perhaps the first of a new kind of currency speculator. He's using a recent discovery of his, the Gaming Open Market, to profit by trading money that can't be used in the real world.

 

The Gaming Open Market, or GOM, is a recently launched website that serves as a currency exchange of sorts. But it's not enabling the buying and selling of different countries' money. Instead, it lets players of a group of online games -- including Ultima Online, Star Wars Galaxies, Second Life, The Sims Online, There and others -- traffic in the currencies of those virtual worlds, trading game money for U.S. dollars or, soon, even allowing players to trade across games.

 

"What I love the most, and the idea that gives me chills, is that I am buying nothing, and then selling nothing, for a profit," said Merrill. "We may not have flying cars, but I think virtual currency exchanges (are) a sign we live in the future." link

(Source: FT) Japan has almost doubled the amount available for foreign exchange market intervention next year, a sign that it will continue to act aggressively to slow the yen's rise against the dollar.

 

Seeking to assert its firepower in the currency markets, the finance ministry said it would raise the ceiling on the amount it could borrow for intervention by Y21,000bn to Y100,000bn ($930bn) for the period until March, and by Y61,000bn to Y140,000bn for the year starting in April. article

(Source: NYTimes, Feb 14, 2003) The United States trade deficit soared to a record of $489.4 billion last year, according to a federal report released on Friday, raising concerns about the problems such a large gap could create.

 

The deficit, which is the difference between the value of foreign goods and services purchased in this country and the amount of American goods and services sold overseas, is now the largest in history.

As a percent of gross domestic product, the goods and services deficit increased to 4.5 percent from 4 percent in 2002. link

(Economist, Mar 31, 2004) The yen is surging again. Will the Japanese authorities halt its rise? Can they?

 

THIS intervention is stupid, said Fumihiko Igarashi, an opposition politician in Japans lower house of parliament. Its a fight we cant win. Indeed, on the day he spoke, Wednesday March 31st, the Japanese monetary authorities ceded one round in their fight with the currency traders. They watched the yen strengthen past ¥105 to the dollar, having intervened furiously in the markets only last month to keep it from crossing that threshold. The defeat became a rout as the yen pushed on to reach a four-year high, at ¥103.4 to the dollar. Traders and analysts are now anticipating the day when the yen is worth a full cent. link