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i've constructed a Forward FX curve using the formula: $F= Spot \frac{(1+I_b*n/N)}{(1+I_c*n/N)}$ when i get these Forward rates for 1 month, 3, 6 till 1 year i got a decreasing forward Fx Curve How to explain that

Regards

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    $\begingroup$ Please properly format your post and explain the notation you use. Why should the curve not be downward sloping? If a currency pair A/B has an upward sloping forward curve then the pair B/A has a downward sloping one. $\endgroup$ – LocalVolatility Sep 7 '17 at 15:58
  • $\begingroup$ Make sure you have the units and the interest rates the right way around. For example if the currency is USDJPY (i.e. how many yen it takes to make a dollar), then in the numerator should be the JAPAN interest rate and in the denominator should be the USA interest rate. For EURUSD, $i_{USD}$ in the numerator and $i_{EUR}$ in the denominator. $\endgroup$ – noob2 Sep 7 '17 at 19:40

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