FX Forwards and the Carry Trade

Adam S. Iqbal ()

Chapter Chapter 2 in Foreign Exchange, 2022, pp 37-55 from Springer

Abstract: Abstract I introduce two concepts that are central to understanding movements in FX markets. The first, covered interest parity (CIP), is arguably the most important concept for FX market participants to understand. It relates the forward exchange rate to the spot exchange rate through the foreign and domestic interest rate.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-93555-9_2

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DOI: 10.1007/978-3-030-93555-9_2

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