Prediction of the currency exchange rate using holt’s exponential smoothing model / Maisarah Fatini Zakria

The latest globalization trends resulted in increasingly interdependent economies of nations and multinational firms. This may leave companies operating internationally at the mercy of the volatility in currency exchange rates. Forecasting these exchange rates became very important in international trade and commerce, as it involves key decisions of foreign investment, forward contracts, and expanding the business to new horizons. This study describes a Holt’s Exponential Smoothing Model(HESM) and its application to currency exchange rate forecasting. A study of HESM is conducted for forecasting exchange rates between the Malaysian Ringgit(MYR) and the US dollar. The data are collected from January 2018 to December 2018. The reliability of the HESM model is measured based on the values of MSE, RMSE, and MAPE. The results showed that the error values are low and it is indicated that the model used is good and reliable.