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Apr 3, 2024
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Setting up a FX forward

An FX forward transaction involves exchanging a flow in one currency with a counterparty for a flow in another currency at a future date more than two business days away (T+2 corresponds to a spot transaction). This foreign exchange contract only generates cash flows at maturity of the term when an exchange is made in each currency of the pair.


For example, if I am a Dollar buyer / Euro seller, I receive a forward amount in USD and pay an amount in Euro to the counterparty in exchange. This exchange is made at the EURUSD forward rate forward rate defined at the inception of the instrument (in T0).



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Setting up a FX forward An FX forward transaction involves exchanging a flow in one currency with a counterparty for a flow in another currency at ...
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