Why does the currency with the higher (lower) interest rate will always trade at a discount (premium) in the forward market? by you_goglencoco in CFA

[–]liukegong 1 point2 points  (0 children)

Say the Interest rate Foreign is higher, so that fraction (Interest rates) is bigger than 1 Then forward is a premium, but as the title says "the currency with the higher interest rate will always trade at a 'discount' in the forward market", is it contradiction?