Forward premium (远期升水)

Forward premium (远期升水 yuǎn qí shēngshuǐ) refers to the situation in which the expected future price for a currency is higher than the spot price. It often indicates that the current domestic exchange rate is going to increase (升高 shēng gāo) against the other currency.

  • The Chinese translation (远期升水 yuǎn qí shēngshuǐ) uses a metaphor to illustrate the increase in the exchange rate. The word ( shēng) means to increase and ( shuǐ) means the water, which gives a vivid picture of the waterline rising from the original level.
  • (yuǎn) as in distant place (远方 yuǎnfāng) or distant relative (远亲 yuǎnqīn).
  • (qī) as in date (日期 rìqī) or deadline (期限 qīxiàn).
  • (shēng) as in rise (上升 shàngshēng) or promote (提升 tíshēng).
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