Forward currency contract

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Forward currency contract

An agreement to buy or sell a country's currency at a specific price, usually 30, 60, or 90 days in the future. This guarantees an exchange rate on a given date.

Forward Currency Contract

An agreement between two parties to exchange two currencies at a given exchange rate at some point in the future, usually 30, 60, or 90 days hence. A forward currency contract mitigates foreign exchange risk for the parties and is most useful when both parties have operations or some other interest in a country using a given currency. Forward currency contracts are over-the-counter contracts.
References in periodicals archive ?
Some foreign currency forward contracts are less liquid, which may result in the Fund being unable to structure its hedging transactions as intended and may be unable to obtain sufficient liquidity in an underlying currency.
As a result, income before foreign currency forward contracts (gains)/losses, finance and income tax expenses of CAN 7.
Although the definition of a foreign currency contract provided in 1256(g)(2) may be read to include a foreign currency option contract, the legislative history of the Technical Corrections Act of 1982, which amended 1256 to include foreign currency contracts, indicates that the Congress intended to extend [section] 1256 treatment only to foreign currency forward contracts that are traded on the interbank market.
Risk strategies: Foreign currency forward contracts, interest rate swaps, commodity swaps.
d) Non-cash items include the effects of (i) stock-based compensation expense, (ii) purchase accounting, (iii) non-cash mark-to-market revaluation of foreign currency forward contracts and unrealized gains or losses on revaluations of the U.
Foreign currency forward contracts are individually negotiated and privately traded such that they are dependent upon the creditworthiness of the counterparty and subject to counterparty risk.
This item briefly examines the definition of a foreign currency contract and, in particular, whether the definition includes foreign currency forward contracts entered into between nonbank counterparties.
d) Non-cash items include the effects of (i) FAS 123 (R) expense, (ii) purchase accounting, (iii) non-cash mark to market revaluation of foreign currency forward contracts and unrealized gains or losses on revaluations of the U.
Utilizing foreign currency forward contracts to hedge foreign currency positions does not eliminate the impact of the movements in the value of non-U.
f) For the fiscal three and six-month periods ended June 29, 2008 and July 1, 2007, represents (i) non-cash mark-to-market revaluation of foreign currency forward contracts, (ii) recognition of realized gain or loss on foreign currency forward contracts, (iii) gains or losses on revaluation of our U.
The company also incurred a non-cash, mark-to-market gain on foreign currency forward contracts of $11.
During the quarter, the company also incurred a non-cash, mark-to-market loss on foreign currency forward contracts of $13.

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