If the peso is traded at a forward discount relative to U.S, dollar, then the U.S. dollar is also trading at a discount relative to the peso.

Question

Quizplus · Accepted Answer

If the peso is traded at a forward discount relative to the U.S. dollar, it means the peso is expected to weaken against the dollar. Consequently, the U.S. dollar would be trading at a forward premium relative to the peso, not a discount.

If the Peso Is Traded at a Forward Discount Relative