If the spot exchange rate is 1.100 USD/EUR and 6 month forward rate 1.133 USD/EUR, the market consensus expectations is that the EUR will appreciate. True or False. ?
I thought true - b/c 6 months from now it take .033 more USD to purchase 1 EUR; so the EUR would have appreciated in terms of USD. Can someone please explain why this is False?
I thought true - b/c 6 months from now it take .033 more USD to purchase 1 EUR; so the EUR would have appreciated in terms of USD. Can someone please explain why this is False?