How are foreign exchange futures quoted against the US dollar?

How are foreign exchange futures quoted against the US dollar?
A . Futures forex prices are always quoted as the number of units of the foreign currency that one US dollar can buy
B . It depends upon the currency – futures forex prices follow the same convention as for spot prices
C . Futures forex prices are always quoted as the number of US dollars one unit of the foreign currency can buy
D . It can be quoted either way, based on whether the contract is for a short maturity or long

View Answer

Answer: C

Explanation:

Price quotes for futures where one of the currencies is the US dollar follow the convention of using the number of US dollars that one unit of the foreign currency can buy. (For JPY, 100 Yen is used.)

In the forward market, the convention used is the same as that used in the spot market.

In the spot market, prices are expressed as the number of units of the foreign currency that 1 USD can buy, except for GBP, EUR, AUD and NZD where it is the other way round (ie, number of USDs that 1 of each of these currencies can buy).