Forward discount

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Forward discount

A currency trades at a forward discount when its forward price is lower than its spot price.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Forward Discount

In currency trading, a situation in which the forward price for the currency is less than the spot price. A forward discount occurs when the market expects the currency to depreciate over time. It is important to note, however, that this does not always actually happen.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Royal Jordanian adds more luxury to the services it offers to its economy class passengers through the one-time Lounge Access Voucher and the Lounge Pass for multiple trips, enabling its customers to experience the comfort and relaxing ambiance of the Crown Lounge at super low prices, said Pichler, adding that RJ will continue putting forward discounts and offers on tickets to the different destinations on its global network throughout 2018.
Amongst advanced economies, Australia and New Zealand have the highest excess returns and forward discounts, whereas Japan and Switzerland have the lowest values for both variables.
I use the forward discount, [fd.sub.t.T] = [S.sub.t] - [f.sub.t,T] to measure the interest rate differential i.e., [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] between the foreign country and the U.S.
Tables 2A-2B show monthly statistics for country political risk, economic and financial risk, forward discount and excess returns.
Finally, I control for interest rate differential (forward discount in this case if CIP holds).
The forward discount [fd.sub.i,t+1] = [S.sub.t]- [f.sub.i,t+1] is equivalent to the interest rate differential between the foreign and domestic country, i.e.
"The forward discounts at which Gulf currencies are traded against the US dollar have recently increased but are still low at around two per cent, implying no devaluation expectations that could put pressure on reserves.

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