futures premium vs cash

Discussion in 'Forex' started by jonnysharp, May 12, 2005.

  1. why does the euro futures trade at a premium to the cash market whereas the gbp and aud don't?

    thanks.
     
  2. That's due to risk-free interest rate differentials, positive vs. negative. Taking a look at the relevant yield curves, for example, the 3-month point: USD 3-month T-Bill rate (2.9%) is less than equivalent AUD (~5.1%) and GBP (4.8%) rates, but greater than 3-month EUR rate (~2.0%).
     
  3. Is there an FX future which would pay ME to trade it? Surely there is some Fourth World currency that bears a negative interest rate. Like the North Korean won-ton?