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Companies Show Clever Currency Moves

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Executive Summary

There's always been a bit of a mystery in the currency markets as to whether it's possible to predict price changes. Unlike stocks and bonds, currencies generally move on macroeconomic - not company-specific - issues. That should make it hard for someone to have inside knowledge and profit from it. However, it's long been suspected that some companies are able to do just that. Because company-level currency transactions are private, trading data is unavailable for study. But Ross professor Paolo Pasquariello found evidence that certain types of companies can time the currency markets to their advantage when he examined American Depository Receipts (ADRs) issued in the United States by foreign firms.

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