Forward points

Forward points (for example one month forward points of 5-8) are a conventional short-form method of quoting multiple forward foreign exchange rates, by reference to the related foreign exchange spot quote.

The spot foreign exchange quote is adjusted by applying, for example, the one-month forward points to it, to calculate the full one month forward foreign exchange quote.

Example

If the spot foreign exchange quote is:

GBP 1 = 1.6000 - 1.6010 USD

And if one-month forward points are 5-8 (rising).

Then the one-month forward exchange quote is calculated by adding the forward points as follows:

1.6000 + 0.0005

= 1.6005 USD

1.6010 + 0.0008

= 1.6018 USD

The full forward quote (bid-offer) is:

GBP 1 = 1.6005 - 1.6018 USD.

See also

• Foreign exchange
• Forward foreign exchange rate
• Spot rate
• Swap points