loren d asked:


Basically an understanding of what goes behind the decisions of selecting to go for a spot rate of exchange or a forward rate of exchange.

Lacey

3 Responses to “What factors influence the spot and forward exchange rates in the forex market?”

1. FC on January 6th, 2009 9:01 am

   The deal is booked.
   The time of the deal is booked.

2. Alex on January 8th, 2009 5:10 am

   The spot and forward exchange rates are related to each other through the interest rate parity. In other words, the difference between the spot and forward rates is the interest rate differential between two currencies.

   Forward rates are used to hedge foreign exchange exposure risk.

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