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Abstract
This paper proposes a theoritical model to assess of ‘news’ on the spot-forward-exchange-rate relationship and thereby predicts of the impact of ‘news’on the exchange rate. Two types of ‘news’ are analysed: rational expectations type innovations and announcement effects form newspapers. By using historical data form a time period which includes the German hyperinflation of the early 1920s, an estimate from of the model is derived which is substantially simpler than the version requried using contemporary data. Preliminary results support the main theoretical predictions but also cast some doubt on a literal interpretation of the exchange rate model plus rational expectations.