If Canada has a current 90 day forward exchange rate value for its currency that is above the current spot exchange rate value of its currency, then the Canadian 90-day interest rate is relatively high.

Question

Quizplus · Accepted Answer

A forward exchange rate above the spot rate typically indicates that the domestic currency (in this case, the Canadian dollar) is expected to depreciate. This is often associated with lower, not higher, domestic interest rates compared to foreign interest rates, according to the interest rate parity theory.

If Canada Has a Current 90 Day Forward Exchange Rate