International Fisher Effect: Difference between revisions
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== See also == | == See also == | ||
* [[Carry trade]] | |||
* [[Depreciation]] | * [[Depreciation]] | ||
* [[Fisher Effect]] | * [[Fisher Effect]] | ||
Revision as of 12:32, 27 May 2020
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.
