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How to quantify deterministic and random influences on the statistics of the foreign exchange market

Rudolf Friedrich, Joachim Peinke, Christoph Renner

physics.data-anarXiv:physics/9901034

Abstract

It is shown that prize changes of the US dollar - German Mark exchange rates upon different delay times can be regarded as a stochastic Marcovian process. Furthermore we show that from the empirical data the Kramers-Moyal coefficients can be estimated. Finally, we present an explicite Fokker-Planck equation which models very precisely the empirical probabilitiy distributions.

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