Forward exchange

Forward exchange

A type of foreign exchange transaction whereby a contract is made to exchange one currency for another at a fixed date in the future at a specified exchange rate. By buying or selling forward exchange, businesses protect themselves against a decrease in the value of a currency they plan to sell at a future 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 ?
A reverse exchange allows you to take advantage of these tax benefits in situations where a forward exchange would be impracticable.
CVG uses forward exchange contracts to hedge certain of its foreign currency transaction exposures primarily related to its United Kingdom operations.
Nakagawa noted that companies have yet to sign forward exchange contracts for next April and subsequent periods.
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
Similarly, another company was unsuccessful in its appeal (43) that its sales-factor denominator should include proceeds from short-term investment sales and gains from forward exchange contracts.
Some of the products available from the Commonwealth Bank include Forward Exchange Contracts, a 24-hour Market Watch service, Foreign Currency Options, or Flexible Forward Contracts.
Provided there are no risk premia associated with currency investments, the forward exchange rate is an indicator of market expectations concerning future exchange rates.
Hedging is accomplished by buying or selling forward exchange contracts for the amounts of the exposed positions.
While strategic decisions, such as the decisions to issue stock-based compensation, to acquire a company, to enter into forward exchange contracts associated with international acquisitions or to restructure leases, are made to further our long-term strategic objectives and do impact our income statement under GAAP, these items may affect multiple periods and management is not able to change or affect these items within any particular period.
Board has kept the Forward Exchange Transaction under close review to ensure
dollar continues to the end of this year, mainly because about 80% of them do business through forward exchange contracts.
If forward exchange contracts (or any such similar instruments) or foreign currency futures are used as hedging instruments,

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