regression to the mean - EUR/GBP - but what is the mean?
Discussion
So, from 2004 to 2007, GBP/EUR was circa 1.45
Dropped to 1.25 from July 07 to April 08
Dropepd further to the virtual 1:1 headline grabbing rates.
It is now heading back.
I am a firm believer in regression to the mean - but what is the 'mean' for a relatively new currency pair?
1.45?
or 1.25?
Clearly, there are underlying economic factors for UK and Eurozone - but the current values are historic extremes which, I expect, will regress.
Just thought I'd open the floor to debate.
Dropped to 1.25 from July 07 to April 08
Dropepd further to the virtual 1:1 headline grabbing rates.
It is now heading back.
I am a firm believer in regression to the mean - but what is the 'mean' for a relatively new currency pair?
1.45?
or 1.25?
Clearly, there are underlying economic factors for UK and Eurozone - but the current values are historic extremes which, I expect, will regress.
Just thought I'd open the floor to debate.
I would ask - why should it regress to the mean and, even if it will, it could still get well above the mean in the mean time...
I am looking at a chart that goes back to 1979 - presumably made up of some basket of Deutsche Marks, Francs etc before the Euro.
Low point in 1981 just above .5, high point prior to this year was in 95 and around .85.
Edited to add those numbers above are EUR/GBP not GBP/EUR
I am looking at a chart that goes back to 1979 - presumably made up of some basket of Deutsche Marks, Francs etc before the Euro.
Low point in 1981 just above .5, high point prior to this year was in 95 and around .85.
Edited to add those numbers above are EUR/GBP not GBP/EUR
Edited by limpsfield on Thursday 23 April 18:36
limpsfield said:
I would ask - why should it regress to the mean and, even if it will, it could still get well above the mean in the mean time...
I am looking at a chart that goes back to 1979 - presumably made up of some basket of Deutsche Marks, Francs etc before the Euro.
Low point in 1981 just above .5, high point prior to this year was in 95 and around .85.
Edited to add those numbers above are EUR/GBP not GBP/EUR
Hurrah.. a response...there is somebody on this forum!!I am looking at a chart that goes back to 1979 - presumably made up of some basket of Deutsche Marks, Francs etc before the Euro.
Low point in 1981 just above .5, high point prior to this year was in 95 and around .85.
Edited to add those numbers above are EUR/GBP not GBP/EUR
Edited by limpsfield on Thursday 23 April 18:36
It will regress to the mean, because that's what all cylical time series do.
johnfm said:
limpsfield said:
I would ask - why should it regress to the mean and, even if it will, it could still get well above the mean in the mean time...
I am looking at a chart that goes back to 1979 - presumably made up of some basket of Deutsche Marks, Francs etc before the Euro.
Low point in 1981 just above .5, high point prior to this year was in 95 and around .85.
Edited to add those numbers above are EUR/GBP not GBP/EUR
Hurrah.. a response...there is somebody on this forum!!I am looking at a chart that goes back to 1979 - presumably made up of some basket of Deutsche Marks, Francs etc before the Euro.
Low point in 1981 just above .5, high point prior to this year was in 95 and around .85.
Edited to add those numbers above are EUR/GBP not GBP/EUR
Edited by limpsfield on Thursday 23 April 18:36
It will regress to the mean, because that's what all cylical time series do.
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