International Fisher Effect: Difference between revisions
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imported>Doug Williamson (Layout.) |
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So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies. | So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies. | ||
== See also == | == See also == | ||
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* [[Four way equivalence model]] | * [[Four way equivalence model]] | ||
* [[Spot rate]] | * [[Spot rate]] | ||
Revision as of 20:23, 2 June 2016
This theory predicts that the spot foreign exchange rate will change over time to reflect and offset differences in interest rates in the respective currencies.
So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies.
