Difference in Rolling spot price and Futures prices

[oriana]

If the futures price of a currency pair is trading higher than the rolling spot price of that pair, does that mean that it is expected that the price of the pair will rise in the future? Likewise if the futures price is lower than the rolling spot price, does that mean that the price of the pair is expected to fall?

Thanks.

 

[rog1111]

no, it's a function of the interest rate differential between the 2 countries, which afferts the cost of carry. Compare $:GBP and $:EUR spot and futures and int rates as examples. Some may argue that the int rate difference will cause a flow of funds from one currency to the other, causing a steady rise or fall over time, but that's a different discussion.

rog1111

If the futures price of a currency pair is trading higher than the rolling spot price of that pair, does that mean that it is expected that the price of the pair will rise in the future? Likewise if the futures price is lower than the rolling spot price, does that mean that the price of the pair is expected to fall?

Thanks.

 

[haro123]

Actually, i m still confused about the difference between spot market and future market and whi is future market price higher then the spot market price??

 

[Martinghoul]

I'd recommend you read Hull, if you're still confused...