Forward premium or discount

The forward rate can be quoted outright or as an adjustment to spot. Whether a currency is at a forward premium or discount depends on which currency is being priced and how the quotation is expressed. A higher number does not invariably mean the same currency is at a premium. Interest-rate differentials help explain forward pricing under covered interest parity, although actual dealing spreads and market conditions matter. Use the quote's units and the stated convention when adding or subtracting points, rather than relying on a phrase without context.