Semi-Strong Market Efficiency

Between the weak market and the final type is one that is half way between.

As such it could be called semi-weak but people have decided on coining this one as semi-strong, instead.

This says that the currency exchange rates do more than just incorporate all the data already known to the market, but more that they also have some information about the state of the economy in general - in other words they also take account of more wide information than that which is just narrowly focused on the particular exchange rates themselves.

It has been commonly held over time that the foreign exchange markets do indeed have precisely this feature and therefore this amount of efficiency.

However there are those that disagree and go with one of the other two models, the third model being described in the next article.

Strong form of Market Efficiency
Is exchange rate forecasting successful
Operating or Economic Risk
Foreign currency hedging explained
Risk and Foreign Exchange

Semi-Strong Market Efficiency

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