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Forward Currency Contracts for Individuals and Small/Medium Businesses
A forward foreign exchange rate is the exchange rate at which one currency can be exchanged for another currency for settlement on a predetermined future date (maturity date).
Clients can hedge their FX (foreign exchange) rate risk by using a forward currency contract. A forward currency contract, often refered to as a foreign exchange contract (FEC), allows clients to lock in an exchange rate today for a currency transfer that needs to occur in the future (between 2 days and 12 months from today). It essentially protects against unfavorable or negative exchange rate movements up until your future currency transfer need.
The forward rate is calculated by adjusting the current market rate (the spot rate) for "forward points", which take into account the difference in interest rates between the two currencies and the time to maturity. The forward points are based on a formula which is standard industry practice.
You do not have to pay the full amount owing on the FEC until the maturity date of the forward contract. There may however be a small deposit required at the commencement of the forward transaction and/or at a later stage prior to the maturity date.
If you would like a quote for a forward exchange rate or just want to know more about forward rates please call one of our foreign exchange experts:
| U.S. Free Call | 1 888 288 7354 |
| Australia Free Call: | 1300 300 424 |
| Canada Local Call: | 1 800 680 0750 |
| NZ Free Call: | 0800 161 868 |
| UK Local Call: | 0845 686 1950 |
| International: | +61 2 8667 8090 |
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