fx-chapter2Spot and Forward FX Market.pptVIP

2.1.1Forward contract Forward is a contract signed today for the delivery of a foreign currency at some specified date in the future, at the price agreed upon today (forward rate) . Different from spot, the value date is more than two days 2.1. Forward Contract Forward Exchange Rate Why need forward: can be used to hedge risk can be used as a means of speculation an example, account payable in FX . 2.1. Forward Contract Forward Exchange Rate A forward rate will protect you against unfavourable movements, but will not allow gains to be made should the exchange rate move in your favo