By Sally Harrison and Caroline Mogford of the Bank's Foreign Exchange Division.
Expectations of future exchange rates can influence moves in the current exchange rate. This article summarises recent developments in the mean forecasts for dollar/euro, dollar/sterling and sterling/euro bilateral exchange rates taken from the Reuters survey. The properties of these mean forecasts are evaluated and the article shows that they are not reliable predictors of future exchange rates.
Recent developments in surveys of exchange rate forecasts