MMS Outshines Other FX Screen Services In January, FX Week Forecast Survey Finds
SERVICES
In a month shattered by the Persian Gulf war, MMS International took top forecasting honors among screen-based forecasting services surveyed by FX Week. MMS managed to shoot closest to the actual rate 20 times out of a possible 36.
I.D.E.A., the London-based analysis service, and McCarthy Crisanti & Maffei's CurrencyWatch staged a close battle for second place, with I.D.E.A. shooting closest to the actual rate 12 times, compared with MCM's 11.
The forecasts were compiled on a weekly basis, for a four week period ended February 1, then weighted for accuracy against the actual rates. The service that gets closest most frequently is considered the most accurate for the month. When two or three of the services all provide identical forecasts, the weighting is evenly split.
CurrencyWatch, MMS and I.D.E.A. all contribute forecasts at the start of the week for rates as of the close of New York trading Friday as published in the Wall Street Journal. Other currency forecasting services have refused to contribute rates for critical review. The survey, which runs on a monthly basis, allows traders a glimpse into the services' accuracy.
Analysts say that January was particularly difficult given the outbreak of war Wednesday, January 16 and during that week forecasts were particularly wide of the actual rates. But it was during that week and in the last week of the month that MMS shot closest with much greater frequency than its competitors. In the week ended January 18 and the week ended February 1, MMS came closest or tied for the top spot, on seven of the nine foreign exchange rates it forecast.
In the first and third weeks of the survey, the battle was far closer. In the week that ended January 11, I.D.E.A. shot closest most frequently. I.D.E.A. provided the most accurate forecast for all four of the cross rates surveyed. MMS provided the most accurate forecasts for the yen, Swiss franc and Canadian dollar. CurrencyWatch put in the most accurate predictions for the Deutsche mark and the pound.
In the week ended January 25, CurrencyWatch hit closest to the target most frequently. CurrencyWatch provided the most accurate forecast for the yen, mark/yen, yen/pound and tied with MMS for accuracy in the mark. I.D.E.A. and MMS ran neck and neck for second place. I.D.E.A. provided the most accurate forecasts for the pound and the mark/pound cross, and tied with MMS on the Canadian dollar, while MMS tied for accuracy with CurrencyWatch on the mark, was the closest on the Swiss franc and tied with I.D.E.A. on the Canadian dollar. All three forecast that the mark/franc cross would end the week at .8350. It actually ended the week at .8465.
As was evident in the last survey, averaging the forecasts together failed to provide a more accurate forecast. In addition, none of the services consistently shot closest in any one currency.
MCM's CurrencyWatch is a Telerate-based foreign exchange service, I.D.E.A. is delivered via Reuters. MMS is now available through through both systems.
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