When it comes to derivative I know that one speaks of backwardation if the spot rate is greater the the futures rate (i.e., S_0>f_0). In this situation the long earns a positive roll yield.
However, when it comes to currency (I refer in the following to the base currency and the price to base nomenclature) we speak of backwardation if the spot exchange rate is below the forwards exchange rate (i.e., S_0
I do not get this. It seems to me odd: S_0>f_0 vs. S_0
Could anyone tries to explain the logic behind these?
Thanks a lot!