Question by  rbudrick (20)

What are spot and forward exchange rates?

Can you explain exchange rates?


Answer by  LippoTheHippo (67)

The spot rate is the current rate at which one currency may be exchanged for another. The forward rate is the rate one can lock in to exchange currency at a future date.


Answer by  Mike39 (320)

The spot exchange rate is the current exchange rate for two currencies. The currencies are delivered to the parties right after the transaction took place. The forward exchange rate is the exchange rate that is agreed upon at time of signing the contract, but the exchange of currencies between the parties will take place on a specific date in future.


Answer by  chrisshah (172)

Spot exchange rate is the rate for a specific currency pair if it has to be delivered right away. A forward rate is the rate for delivering the currency at a future date. The forward rate always contains a tenor. For example the spot GBP/USD is 1.42 while 3M forward GBPUSD is 1.51.

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