Untitled

Lock in exchange Rates

Forward Contracts

Would gaining certainty over your exchange rates help you better manage the costs of doing business internationally and protect your margins?

Using forward contracts to hedge currency risk

For businesses, a forward contract allows you to lock in today's exchange rate for a future transaction, ensuring that you know exactly what rate you will receive regardless of how the market moves later. This provides certainty, protects your profit margins from adverse currency fluctuations, and enables more accurate budgeting and financial planning. By setting the rate at the time you book the contract, you eliminate the risk of future exchange rate changes impacting your business costs or revenues.

Types of FX forwards we offer

Fixed forwards

A contractual agreement to exchange a specified amount of one currency for another at a predetermined, fixed exchange rate on a future date. This instrument is customisable in terms of currency amounts, and settlement (or maturity) date.
Open forwards

A contractual agreement to buy or sell a specified amount of one currency against another on or before a specified “value date”. Unlike a fixed (closed) forward, you can make multiple drawdowns (partial settlements) at different times during the contract period, as long as the total amount is settled by maturity.
Window forwards

A type of foreign exchange forward contract that allows the currency exchange to occur on one or more dates within a specified time frame or "window," rather than on a single fixed settlement date. The exchange rate is agreed upon in advance, but the actual settlement can be done in parts or full at any time within this pre-agreed interval. If the party holding the contract does not elect to settle earlier, the contract is automatically settled on the last date of the window.
Non-deliverable forwards

A non-deliverable FX forward (NDF) is a type of foreign exchange forward contract where the actual physical exchange of the currencies does not occur. Instead, the contract is settled in cash.
Non-deliverable forwards (NDFs) are typically used to hedge currency risk in markets that are less liquid or where physical delivery of the foreign currency isn’t needed. These contracts are settled based on market value, helping reduce cash flow strain while still providing effective exchange rate protection.
Multi-contract forwards

You have the flexibility to set up as many as 25 forward contracts either open or closed across up to three currency pairs simultaneously. While scheduling these contracts, you can choose the drawdown dates, specify the currencies involved, and select the appropriate settlement accounts. This functionality offers businesses greater control and ease in managing currency exposure, supporting cash flow planning and balance sheet protection. Multi-forward contracts can be arranged through your dealer or directly via the online platform.

Fast facts

The 2022 CAD/USD range was 14%
The 2022 GBP/USD range was 33%
The 2022 EUR/USD range was 21%

Are forwards right for you?

Advantages of forwards

You can lock in a specific exchange rate for an upcoming transaction, which is particularly useful if you anticipate unfavorable market movements.
Disadvantages of forwards

Once a forward contract is in place, you’re committed to the agreed exchange rate even if the market shifts in your favor. This means you might miss out on a more advantageous rate that becomes available later.
Ideal candidate for forwards

Forward contracts may be suitable if you have an upcoming obligation to pay in a foreign currency or are expecting to receive foreign funds in the future.

Speak with an expert