The chart on the right shows the
U.S. Dollar Forward Premium (+) or Forward Discount relative to
the Canadian Dollar. The bid-ask midpoint rates shown apply
to large-volume transactions in the interbank
market around noon time (Eastern) on Tuesday, October 16, 2018.
The precise forward rates, in U.S. Dollars
per 1 Canadian Dollar, appear in the table on the left.
Also reported are the implied
forward premium or discount, and the implied foreign
interest rate differential at an annualized rate
where f and s are the forward and spot rate,
and d is the forward time in years.
If the Canadian Dollar is trading at a USD forward premium,
the Canadian Dollar is expected to appreciate. The reverse
is true for a forward discount. However, forward rates
are poor predictors of the corresponding future spot rates.