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It is fair to assume that the ECB will continue doing QE until it gets the desired exchange rate effect.
ANZ economists attributed the slump in imports this year to lower commodity prices and the "exchange rate effect", suggesting the impact of a stronger Chinese yuan.
European dividends fell by 12.2% to $204.5 billion in 2105 "due to a dramatic exchange rate effect which wiped $41.7 billion off the value of payouts," said Henderson Global.
Source and recipient countries may have quite different views on the size, or even the sign, of the net spillover (output plus exchange rate effect), as the debates surrounding "currency wars" showed.
Although the baht depreciation helped increase the export earnings in baht, the decline in world agricultural prices offset the exchange rate effect on exports.
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The insignificant effect of exchange rate effects on stock returns in case of China, India and Japan may reveal the effective hedging strategies against the currency risk in these countries.
While part of that reflects exchange rate effects, Tony Norfield of ABN Amro theorized it might indicate a preference to buy imported goods.
The overall increase was driven by a 40% leap in the number of high earners in the UK, to 2,926 from 2,086, which partly reflected exchange rate effects as most City bankers are paid in sterling.
I chose to work with local stock market indices instead of global stock market indices in order avoid direct exchange rate effects that by construction appear in large international indices.
It says that while it is true that the UK has been cutting its defence spending levels, this fall to fifth place is partly due to exchange rate effects: if sterling-dollar exchange rates from last week were applied to UK defence spending levels instead, these would rise from $57bn to $61.1bn in US dollar terms, above Saudi Arabia and into fourth place.
However, unemployment and nominal exchange rates effects on life expectancy have been found very relevant in the study.
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