Forward Discount

外汇网2021-06-19 14:08:59 55

In a foreign exchange situation where the domestic current spot exchange rate is trading at a higher level then the current domestic futures spot rate for a maturity period. A forward discount is an indication by the market that the current domestic exchange rate is going to depciate in value against another currency.

|||A forward discount means the market expects the domestic currency to depciate against another currency, but that is not to say that will happen. Although the forward expectation's theory of exchange rates states this is the case, the theory does not always hold.

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