Asymmetry in forward exchange rate bias: A puzzling result

Yangru Wu, Hua Zhang

Research output: Contribution to journalArticlepeer-review

19 Scopus citations


In this paper we document that the hypothesis that the forward exchange rate discount is an unbiased predictor of future currency depreciation holds in periods when the forward US dollar is quoted at a premium against the Japanese yen and the Deutschmark, but fails when it is quoted at a discount for the post-Bretton Woods floating exchange rate era. Moreover, the observed asymmetry is statistically significant. This puzzling result remains to be explained.

Original languageEnglish (US)
Pages (from-to)407-411
Number of pages5
JournalEconomics Letters
Issue number3
StatePublished - Mar 1996
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


  • Forward market efficiency
  • Unbiasedness hypothesis


Dive into the research topics of 'Asymmetry in forward exchange rate bias: A puzzling result'. Together they form a unique fingerprint.

Cite this