ABSTRACT
In this chapter, the authors attempt a general taxonomy of the events affecting the currency markets in order to be able to state that they have collected a representative sample of all the exchange rate moving events, and provide a concise example of the news included in the news bank. Newsmetrics significantly extends the number of news items that are potentially useful to explain the exchange rate dynamics. The models from which the exchange rate equations have been derived, can be grouped under three fundamental schemes: the Keynesian Mundell-Fleming model, the monetary model and the portfolio balance model. The Lira-Deutsche Mark exchange rate equations contain a first part referring to the macroeconomic fundamentals, represented the differentials in interest rates and by the consumer inflation dynamics in Italy, and to statistical-technical analysis type of variables. The second part of the equation contains the news-variables.
