Unlike the spot exchange rate, the forward exchange rate is not only affected by the market conditions during the transaction. The change of interest rate, the trend of international capital and even the change of political and economic situation at home and abroad may affect its dynamics.
There are two pricing methods for forward exchange rate, one is to directly mark its actual exchange rate, and the other is to mark the difference between forward exchange rate and spot exchange rate with premium, discount and price, which is called forward difference. Premium means that the forward exchange rate is higher than the spot exchange rate. If direct quotation is adopted, the forward exchange rate marked with premium is equal to the spot exchange rate minus the premium amount. For example, the forward exchange rate of USD against GBP is 0.0 1 USD. If the spot exchange rate is 1 GBP = 1.54 USD, the forward exchange rate is1.54-0.01=1.53 USD. Discount means that the forward exchange rate is lower than the spot exchange rate. If indirect pricing method is adopted, the forward exchange rate marked as discount is equal to the spot exchange rate plus the discount amount. Parity means that the forward exchange rate is equal to the spot exchange rate.
The ascending (gelatinized) water quantity is customarily called the ascending (gelatinized) water point. Its calculation formula is:
For example, on a certain day, the spot exchange rate of USD/JPY is 128.80, the 3-month deposit interest rate of USD is 7.875%, the 3-month deposit interest rate of JPY is 5%, and the USD interest rate is higher than JPY, so the forward exchange rate of USD (3 months) is a discount. The paste point is:
Therefore, the three-month forward exchange rate of USD/JPY is:
128.80-0.93= 127.87
Spot exchange rate usually refers to the central parity of RMB foreign exchange quoted by the People's Bank of China on that day.
According to the delivery period of foreign exchange transactions, exchange rates can be divided into spot exchange rates and forward exchange rates. The so-called delivery means that the buyer and the seller perform the transaction contract, giving and receiving money and goods. The delivery of foreign exchange transactions refers to the behavior that the buyer pays the domestic currency and the seller pays the foreign exchange. Due to different delivery dates, the exchange rate is different.
Spot exchange rate, also known as spot exchange rate, is the exchange rate used by buyers and sellers for foreign exchange delivery within two business days after the transaction.
Forward exchange rate, also known as forward exchange rate, is the exchange rate agreed by buyers and sellers in advance for foreign exchange delivery on a certain date in the future. [ 1]