Spot exchange rates


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Spot exchange rates

Spot Exchange Rate

The exchange rate for which two parties agree to trade two currencies at the present moment. The spot exchange rate is usually at or close to the current market rate because the transaction occurs in real time and not at some point in the future. Some analysts believe that forward rates are an accurate predictor of future spot rates, though many others dispute this. See also: Forward exchange.
References in periodicals archive ?
The forward premium is the percentage difference between the forward rate and the spot exchange rate.
which states that expected movements in the spot exchange rate reflect the expected inflation differential between the home country and foreign country.
It was found that there is a systematic long run relationship between the current forward exchange rate, the parity forward exchange rate and one period ahead spot exchange rate.
t+k] is the rate of depreciation of the spot exchange rate between t and t+k.
The above tables give, for all parities, the results of modelling of the change of spot exchange rate as a function of changes in the forward exchange rate as well as the level of disequilibrium in the cointegrating relationship.
Because the forward price is linked to the spot price through covered interest parity, intervention in the forward market can influence the spot exchange rate.
if the future spot exchange rate at the time the forward
We also initially examine the distributions of changes in future and spot exchange rates and changes in unexpected money growth for the pre- and post-February 1985 subperiods.
and foreign interest rates, the change to spot exchange rates necessary to reequilibrate the balance of payments is larger compared with that in the 1970s.
In his chapter on rational expectations, he provides evidence that spot exchange rates predict changes in forward exchange rates but not vice versa.
Consequently, empirical investigations into the discrepancies between forward and future spot exchange rates should incorporate the potentially central role of real exchange rates.
Order intake and invoicing are posted according to actual spot exchange rates, respectively.