Show Summary Details

Page of

Printed from Oxford Research Encyclopedias, Economics and Finance. Under the terms of the licence agreement, an individual user may print out a single article for personal use (for details see Privacy Policy and Legal Notice).

date: 03 March 2021

Microstructure of Foreign Exchange Marketslocked

  • Martin D. D. EvansMartin D. D. EvansDepartment of Economics, Georgetown University; National Bureau of Economic Research (NBER)
  •  and Dagfinn RimeDagfinn RimeDepartment of Finance, BI Norwegian Business School

Summary

An overview of research on the microstructure of foreign exchange (FX) markets is presented. We begin by summarizing the institutional features of FX trading and describe how they have evolved since the 1980s. We then explain how these features are represented in microstructure models of FX trading. Next, we describe the links between microstructure and traditional macro exchange-rate models and summarize how these links have been explored in recent empirical research. Finally, we provide a microstructure perspective on two recent areas of interest in exchange-rate economics: the behavior of returns on currency portfolios, and questions of competition and regulation.

You do not currently have access to this article

Login

Please login to access the full content.

Subscribe

Access to the full content requires a subscription