Currency Forward Contracts

A currency forward contract is a financial agreement between two parties to buy or sell a specific amount of foreign currency at a predetermined rate on a future date. This tool helps businesses and investors manage the risk of currency price fluctuations, ensuring they know exactly what rate they'll pay or receive later. It's similar to booking a fixed price today for a service or product that will be exchanged in the future, providing certainty and protection against unpredictable currency movements.