There is only one reason for a currency to trade at a forward premium - it has a lower interest rate than the terms currency.

Name: There is only one reason for a currency to trade at a forward premium - it has a lower interest rate than the terms currency.
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A currency will trade at a forward premium when it has a lower interest rate compared to the terms currency, as investors demand a higher return to compensate for the lower interest rate.

There Is Only One Reason for a Currency to Trade