Klein, Michael W2023-05-222004-03-221993-11-012017-07-18https://repository.upenn.edu/handle/20.500.14332/34277This paper provides a framework for evaluating how market participants beliefs about foreign exchange target zones change as they learn about central bank intervention policy. We generalize the standard target-zone model to allow for intra-marginal intervention. Intra-marginal intervention implies that market participants' beliefs about the target zone can be determined from their beliefs about the likelihood of intervention. We then estimate a daily probability of intervention model for the period following the Louvre Accord. We find that the market's views of intervention target zones would have varied quite a bit over time even over this relatively stable period.© 1993. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/Finance and Financial ManagementArticle