On this site, Average Error (50%) refers to a 50% forecast error margin. Estimated from past forecast performance, this margin defines a range around the forecast that is intended to contain the actual outcome about half the time.

Subtract the error margin from the forecast to find the lower limit, and add it to find the upper limit. The margin is expressed in the same units as the forecast.

Example: Euro to U.S. Dollar Forecast

For an illustrative monthly average EUR/USD forecast of 1.1200 U.S. dollars per euro and a 50% error margin of ±0.0100:

• Lower limit: 1.1200 − 0.0100 = 1.1100
• Upper limit: 1.1200 + 0.0100 = 1.1300

The resulting range is 1.1100 to 1.1300 U.S. dollars per euro. Across comparable forecasts, about half of actual monthly averages are expected to fall inside their respective ranges and about half outside.

The 50% figure describes estimated coverage of the range; it does not mean the forecast has a 50% error. Actual outcomes can exceed either limit, and future coverage may differ from historical experience.