discounted cash flow valuation in Forex Trading: An Overview
Discounted cash flow (DCF) valuation is a financial analysis technique used by investors to calculate the fair value of a forex currency pair. DCF valuation involves discounting cash flows that are expected to be generated from a currency pair in the future by an appropriate rate of return. This technique can help investors determine if the exchange rate on a certain currency pair is at a fair price considering expected future cash flows. DCF valuation is often used by professional investors to evaluate investment opportunities in the foreign exchange markets.