Forward Contracts

Buy or sell currency now, pay later. Whether you are looking to take advantage of current market conditions or just like to plan ahead, eliminate the risk of unfavorable currency market moves between now and the time you need to make your payment with forward contracts. 

 

The Benefits

  • Secure today’s exchange rate, for delivery at a future date 
  • Free up cash flow, with only a small initial deposit required  
  • Protect profits from unfavorable market moves 
  • Easier and more effective budgeting and planning 

Exchange rates move constantly. Forward contracts give your business the freedom and flexibility to take the unpredictability out of currency conversion and budget effectively to protect your profit margins from negative market movements. This means no more worrying about currency market volatility. Regardless of which direction the market moves you will know the exact cost of the amount you need when you are ready to make a transfer. The best part: you don’t have to pay until the currency is needed, keeping that cash free for other uses; in other words, planning and budgeting just got a little more stress-free. 

How It Works

Set the amount of currency needed and settlement date, typically up to two years in the future, at the current exchange rate, plus forward points.  All you pay at the time of booking is a small deposit, which is then applied to the balance of the forward contract when the forward is due on the settlement date.

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Fixed-Date Forwards

If you find yourself with flexible payment terms or know you’ll need a certain amount of currency at a specific date in the future, then fixed-date forwards might be your ideal solution. Unlike spot transactions, fixed-date forwards allow you to buy or sell currency with delivery for one specific date in the future, out to two years.

Window Forwards

If you are unsure of the exact date you will need funds or expect to draw funds multiple times during the life of a contract, then window forwards might be the best solution for you. Similar to fixed-date forwards, window forwards allow you to buy or sell currency with delivery for a time in the future, out to two years. However, instead of one specific date, window forwards allow you to draw funds as often as you like within a set timeframe. This gives you complete payment flexibility to access your funds as they are needed without having to commit to a specific date. The funds can be drawn at any point in the window or until the window forward is due on the settlement date.

Non-Deliverable Forwards

If you are looking to manage your currency exposure and accurately budget in currencies that are not freely convertible, then non-deliverable forwards might be the solution for you. Similar to a standard forward contract, non-deliverable forwards secure an exchange rate for a certain period of time. However, due to government restrictions on foreign access to local currency, no exchange of the underlying currency takes place – hence the name, non-deliverable. Instead the contract is settled in U.S. dollars, based on the difference between the agreed forward exchange rate and the spot rate at the end of the contract.  


Want more?

Forwards are the most effective way of managing foreign exchange risk, giving you piece of mind over planning and budgeting your international payments. Need help working out the best time to make the most of your money transfers? See how our specialist can help.

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How it Works: Step 1
Book an FX Deal

In less than minutes, you can book your FX deal—tell us how much and where to send the funds in which currency. Get your competitive quote instantly, and then confirm your deal.  Track your progress by setting up your personalized online account or work directly with your Account Manager.

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How it Works: Step 2
Send Us Your Funds

Send us your funds via wire transfer, fax a check or we can set you up with an ACH direct debit.

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How it Works: Step 3
We Deliver Your Payments

Send us your funds via wire transfer, fax a check or we can set you up with an ACH direct debit.

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