Expected Spot Rate

Expected Spot Rate

The exchange rate between two currencies that is anticipated to prevail in the spot market on a given future date. It differs from the current spot rate primarily by the extent to which inflation expectations in the two currencies differ.
References in periodicals archive ?
The point of departure of this theory is that the forward rate is a poor predictor of the future spot rate because it embeds both the expected spot rate and a time-varying liquidity or term premium.
dollar during the 1973-82 period, and concluded that the covariance between the expected spot rate and the risk premium components of the forward price is negative, and that the variance of the risk premium component is much larger than its counterpart.
Forward Foreign Exchange Rates, Expected Spot Rates and Premia: A Signal Extraction Approach.