Investing Strategies as a Sharp Movement in Exchange Rates Occurred: Evidence for the Constituent Stocks of SSE 50 and TW 50

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Title:	Investing Strategies as a Sharp Movement in Exchange Rates Occurred: Evidence for the Constituent Stocks of SSE 50 and TW 50
Authors:	Min-Yuh Day;Manhwa Wu;Paoyu Huang;Yensen Ni
Date:	2018-12
Issue Date:	2018-06-14 12:10:35 (UTC+8)
Publisher:	Pageant Media Ltd
Abstract:	We argue that the sharp movement in exchange rates may result in stock market fluctuation due to investors’ sentiments stimulated. To our knowledge, we document that the performance of trading stocks as the sharp currency movement occurred seems unexplored in the relevant literature, which might contribute to the existing literature. By using the constituent stocks of SSE 50 and TW 50 as our samples owing to comparing these two economies in Asia, we reveal that share prices would either drop substantially as the sharp depreciation or enhanced considerably as the sharp appreciation in Chinese Yuan (CNY) far different from that share prices move slightly as the sharp movement in New Taiwan Dollar (TWD), even though CNY likely managed by the authority is much less volatile than TWD. We argue that our results would be beneficial for investors in trading these constituent stocks as the occurrence of the sharp currency movement.
Relation:	The Journal of Investing 27 (4) , p.58-68
DOI:	10.3905/joi.2018.27.4.058
Appears in Collections:	[Department of Management Sciences] Journal Article

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