By Neil Cooper and James Talbot of the Bank’s Monetary Instruments and Markets Division
To help to assess market participants’ views on exchange rate developments, the Bank of England uses a range of techniques that employ information from the over-the-counter (OTC) currency options markets. This article describes these techniques and shows how they can be used to assist our understanding of market perceptions of the yen/dollar exchange rate over this period.
The yen/dollar exchange rate in 1998: views from options markets