Spot FX Transactions

Spot FX transactions involve the immediate exchange of one currency for another at an agreed-upon exchange rate, typically settled within two business days. They are commonly used by businesses and traders to fulfill short-term currency needs or hedge against exchange rate fluctuations. The rate is determined by the current market conditions, and since settlement occurs quickly, these transactions reflect the real-time value of currencies. Essentially, a spot FX deal is a quick, straightforward conversion of money from one currency to another at the prevailing rate.