© K. Cuthbertson and D. Nitzsche Figures for Chapter 16 SPOT FX : FUNDAMENTALS AND NOISE TRADERS (Investments : Spot and Derivatives Markets)

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© K. Cuthbertson and D. Nitzsche Figures for Chapter 16 SPOT FX : FUNDAMENTALS AND NOISE TRADERS (Investments : Spot and Derivatives Markets)

© K. Cuthbertson and D. Nitzsche Figure 16.1 : Russian crisis: Rouble-USD exchange rate and relative M S Rouble -Dollar exchange rate Relative money supply (M(Russ)/M(US))

© K. Cuthbertson and D. Nitzsche Figure 16.2a : Overshooting (long run) t = 0 Time £99 £100 UK price level UK interest rate r  = tight monetary policy A C

© K. Cuthbertson and D. Nitzsche Figure 16.2b : Overshooting (short run) t = 0 Time Exchange rate UK interest rate 1.03 A B C Expected depreciation of 2% Appreciation of £

© K. Cuthbertson and D. Nitzsche Figure 16.3 : German mark-Pound Sterling exchange rates (actual and PPP) Actual exchange rate PPP exchange rate

© K. Cuthbertson and D. Nitzsche Figure 16.4 : French franc-German mark exchange rates (actual and PPP) Actual exchange rate PPP exchange rate

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