Bloomberg releases FX Rate Forecast Mode

Bloomberg has released a new function - the FX Rate Forecast Mode (FXFM), which uses implied volatility prices from the FX options market to calculate the probability of future exchange rate movements.

First Published by e-Forex News: October, 2009

Bloomberg has released a new function - the FX Rate Forecast Mode (FXFM), which uses implied volatility prices from the FX options market to calculate the probability of future exchange rate movements. Users can graphically compare the forecast model implied probability distribution with contributed forecasts from FX analysts.

Bloomberg releases FX Rate Forecast Mode

FXFM also has a Probability Calculator tool resembling a spreadsheet with a comprehensive semantic language for asking direct questions to the forecast model. For any time period, a user can determine the market probability that an exchange rate will stay within a range, cross a particular level or move a certain percentage. Users can determine the probability of barrier or stop loss levels being reached, options expiring in or out of the money, and much more.