Foreign Exchange transactions?

Question

Suppose I expect Yen to depreciate by 7 percent against the dollar over the next 3 months. How can I profit through

(a) spot market transactions only, and

(b) forward market transactions only?

Answer 1

If you expect yen is going to depreciate in the next three months. I don't think it is a good idea to buy spot month.

Answer 2

Sine their respective interest rate differential is small. (1.5%) you wont be paying much in commission, either route will be satisfactory. With spot you will have the luxury of being wrong on the time frame. Not so with futures. Both will give a lot of leverage.