Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
In currency trading, a theory stating that the forward exchange rate for a currency is an unbiased predictor of the future spot rate. That is, all other things being equal, forward parity states that exchange rate trades for some future dates will accurately predict what the exchange rate will be on that date in the future. See also: Forward discount.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved