1. Currency with high interest rate depreciates in the future, that is, forward discount. Low interest rate currencies increase forward premium. What kind of interest rate change between the benchmark currency and the quotation currency will produce different results:

2. If the interest rate of benchmark currency rises, the forward benchmark currency depreciates, that is, the forward exchange rate falls, that is, the forward discount;

3. If the interest rate of quotation currency rises, the forward quotation currency depreciates and the forward exchange rate rises, that is, the forward premium.

Premium refers to determining whether the forward exchange rate is rising or falling by analyzing the exchange rate trend. If the forward exchange rate is more expensive than the spot exchange rate, it is a premium, otherwise it is a discount, and the corresponding rising and falling prices are the premium amount and the discount amount.