Forward Exchange Contracts

Forward exchange contracts are contracts or agreements to exchange one currency for another at a pre-determined exchange rate at a specific time in the future.

These contracts are used to protect the buyer or owner of the contract from fluctuations in exchange rates and can be a good hedging tool to provide certainty when trying to determine pricing.

Forward exchange contracts are calculated using the respective interest rate differentials of the respective currencies concerned in the contract,

FX Capital can assist in establishing a hedging strategy using forward exchange contracts; fixed, optional or partially optional contracts.