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My 10 cents: Yes, the EUR is trading at a discount to USD. Think 100 - 2.8 = 97.2 for EUR, whereas 100 - 1.5 = 98.5 for USD so EUR is at a discount to USD. The calculation of premium and discount is in the forward pips. In your case it's spot - pips = forward 1.3195 - 0.0195 = 1.3000 So yes, the EUR cost in 6 months is $2500 / 1.3 = €1923.07 you agree ...


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A good question... clearly you've read using 3 month forwards and see they are more liquid than other FX forward instruments. I guess that if there were only 3 month forward contracts in the market then by buying and selling the 3 months for different maturities, you could structure a set of 1 month forwards. so from today 21st Aug to hedge a short ...



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