Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals
The purpose of this study is to find symmetries and asymmetries in the exchange rate and macroeconomic fundamentals of advanced European markets, namely Denmark, the Euro Area, and United Kingdom, for the period of 2011 to 2022 via application of the NARDL technique. The findings reveal that interes...
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| Format: | Article |
| Language: | English |
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MDPI AG
2024-11-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/12/12/326 |
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| author | Mosab I. Tabash Muhammad AsadUllah Quratulain Siddiq Marwan Mansour Linda Nalini Daniel Mujeeb Saif Mohsen Al-Absy |
| author_facet | Mosab I. Tabash Muhammad AsadUllah Quratulain Siddiq Marwan Mansour Linda Nalini Daniel Mujeeb Saif Mohsen Al-Absy |
| author_sort | Mosab I. Tabash |
| collection | DOAJ |
| description | The purpose of this study is to find symmetries and asymmetries in the exchange rate and macroeconomic fundamentals of advanced European markets, namely Denmark, the Euro Area, and United Kingdom, for the period of 2011 to 2022 via application of the NARDL technique. The findings reveal that interest rate affects DKK exchange rate asymmetrically in the long and short run, whereas money supply affects it in the short run. Foreign reserves are found to be helpful for all three currencies in stabilizing the exchange rate. A decline in gold price weakens GBP, DKK, and EUR in the long run. Previous studies suggest that the existence of asymmetrical relationships justifies the selection of NARDL for empirical analysis. This study makes a contribution to the existing literature, as it proves that forecasting via NARDL is also robust for analysis. The findings have significant policy implications for financial applications. |
| format | Article |
| id | doaj-art-4f2431ebd5d94a589c20463eff3d4e44 |
| institution | DOAJ |
| issn | 2227-7099 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj-art-4f2431ebd5d94a589c20463eff3d4e442025-08-20T02:53:25ZengMDPI AGEconomies2227-70992024-11-01121232610.3390/economies12120326Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic FundamentalsMosab I. Tabash0Muhammad AsadUllah1Quratulain Siddiq2Marwan Mansour3Linda Nalini Daniel4Mujeeb Saif Mohsen Al-Absy5Department of Business Administration, College of Business, Al Ain University, Al Ain P.O. Box 64141, United Arab EmiratesKarachi Institute of Economics and Technology, College of Management Sciences, Karachi 75080, PakistanSchool of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaAccounting Department, Business Faculty, Amman Arab University, Amman 11953, JordanBusiness Department, Higher Colleges of Technology, Abu Dhabi P.O. Box 41012, United Arab EmiratesAccounting and Financial Science Department, College of Administrative and Financial Science, Gulf University, Sanad 26489, BahrainThe purpose of this study is to find symmetries and asymmetries in the exchange rate and macroeconomic fundamentals of advanced European markets, namely Denmark, the Euro Area, and United Kingdom, for the period of 2011 to 2022 via application of the NARDL technique. The findings reveal that interest rate affects DKK exchange rate asymmetrically in the long and short run, whereas money supply affects it in the short run. Foreign reserves are found to be helpful for all three currencies in stabilizing the exchange rate. A decline in gold price weakens GBP, DKK, and EUR in the long run. Previous studies suggest that the existence of asymmetrical relationships justifies the selection of NARDL for empirical analysis. This study makes a contribution to the existing literature, as it proves that forecasting via NARDL is also robust for analysis. The findings have significant policy implications for financial applications.https://www.mdpi.com/2227-7099/12/12/326exchange rateNARDLsymmetriesasymmetriesforecasting |
| spellingShingle | Mosab I. Tabash Muhammad AsadUllah Quratulain Siddiq Marwan Mansour Linda Nalini Daniel Mujeeb Saif Mohsen Al-Absy Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals Economies exchange rate NARDL symmetries asymmetries forecasting |
| title | Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals |
| title_full | Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals |
| title_fullStr | Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals |
| title_full_unstemmed | Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals |
| title_short | Symmetries or Asymmetries: How MSCI Index Advanced European Markets’ Exchange Rates Respond to Macro-Economic Fundamentals |
| title_sort | symmetries or asymmetries how msci index advanced european markets exchange rates respond to macro economic fundamentals |
| topic | exchange rate NARDL symmetries asymmetries forecasting |
| url | https://www.mdpi.com/2227-7099/12/12/326 |
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