Re:Finance geeks: what's behind this odd chart?
by kingkongrevenge on Thursday August 16, 2007 @01:39PM
(#43120)
This pattern is anomalous. It cannot be explained by normal daily activities because it does not happen every day, just for the last five.
Re:Finance geeks: what's behind this odd chart?
by nostrademons on Thursday August 16, 2007 @01:58PM
(#43136)
Is there a way to get historical intraday data for currencies, beyond the last 5 days?
I'm just going by what the data shows - this is a plausible explanation given the times and known facts about the domestic financial system. (For example, domestic banks have the balance all deposits daily to ensure they meet reserve requirements.) If you can find data that refutes this hypothesis, be my guest. Simple assertions don't count, though.
Anyway, the stairstep is at 4:00 AM GMT, which happens to be midnight EDT. I don't know about the intricacies of currency markets, but I'd imagine there's some sort of daily currency balancing where the main banks buy all the currency they need to settle international transactions on behalf of customers. Note that there's a sharp gap downwards between 9:00 PM and midnight GMT (when European banks would presumably be buying dollars to settle international transactions), and a sharp gap upwards at midnight EDT (when U.S. banks would presumably be buying euros to settle international transactions.)