Talk:Currency future
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Interest Rates
[edit]These contracts don't pay interest rates but I heard they have a upward bias that is routhly the same as the interest rate paid on the currency. Maybe someone can clarify
- Yes, please see Forward contract#Rational pricing for the complete explanation. Basically, you can neutralize (or hedge) a futures position by entering into a spot transaction today and putting the cash into an interest-bearing account. Because of that, these contracts will have a pricing relationship that have an embedded interest rate component. Finnancier (talk) 13:12, 15 December 2007 (UTC)
Currency futures and forwards
[edit]I realize that some of the information may not be accurate, or may only apply to forwards and not futures. Should we make a clearer distinction between the two? Finnancier (talk) 13:25, 16 December 2007 (UTC)
In the very beginning of the article it says: "Typically, one of the currencies is the US dollar. The price of a future is then in terms of US dollars per unit of other currency. This can be different from the standard way of quoting in the spot foreign exchange markets." - This may sound ok is you live in the USA, but people from the rest of the world read wikipedia to. Maybe this could be changed into an example where the US dollar is one of the currnecies.