Currency Forward

Currency Forward

An agreement between two parties to exchange a certain amount in currencies at a certain rate at a certain time. When a forward contract of any sort is made, terms are negotiated directly between the parties, unlike a futures contract, which trades on an exchange. Partly because there is little secondary market for forward contract, determining the forward price is a zero-sum game: one party will gain on the contract and one will lose. Thus, in a currency forward, each party believes that the prevailing exchange rate will move in a direction favorable to him/her by the expiry of the contract.
References in periodicals archive ?
However, the recent sharp decline of oil prices has fuelled speculation in the currency forward markets about possible devaluation of GCC currencies, QNB said.
Foreign currency forward contracts are a type of derivative contract whereby the Fund may agree to buy or sell a country's or region's currency at a specific price on a specific date in the future.
As required under the terms of the Facility, the Company has executed US dollar interest rate swaps and foreign currency forward strip contracts to manage interest rate risk and foreign exchange risk associated with the US dollar variable rate term loan facility.
As a result, income before foreign currency forward contracts (gains)/losses, finance and income tax expenses of CAN 7.
For certain foreign currency derivatives, such as a foreign currency forward contract, Sec.
However, Chris Bradshaw of Attraction Tickets Direct (ATD), says: ``All major opera-tors have bought currency forward to plan programmes and prices for 2005, and their prices won't change much from now on.
Risk strategies: Monsanto handles market risk related to interest foreign currency rates and commodity prices by engaging in various derivative transactions, including foreign currency forward exchange contracts and foreign currency options
Also, if you are sure of your transaction don't be afraid to buy currency forward.
currency forward contracts (which lock in the price of a currency for settlement at a specified future date).
They will then purchase currency forward against NOK.
For example, assume a taxpayer undertakes to purchase a piece of equipment to be used in its trade or business and simultaneously enters into a foreign currency forward contract (because the contract price was denominated in a foreign currency) to "fix" the price of the equipment in U.
For example, the combination of buying a call option and selling a put option at the same strike price for the same maturity is the equivalent of buying the currency forward at that strike price.