Foreign Exchange Committee and Foreign exchange forward contract: Difference between pages

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''US.''
A transaction which solely involves the exchange of two different currencies:
(i) on a specific future date
(ii) at a fixed foreign exchange rate which is pre-agreed at the outset of the contract.


(FXC).
Foreign exchange forward contracts are used - among other purposes - for hedging forward foreign exchange exposures.
For example known or likely future currency receivables and payables.


The FXC includes representatives of major financial institutions engaged in foreign currency trading in the United States and is sponsored by the Federal Reserve Bank of New York.
They are priced by adjusting the spot foreign exchange rate to reflect the interest rate differential between the two currencies involved for the forward period.
 
 
The Foreign Exchange Committee is established to:
 
#Serve as a forum for the discussion of good practice and technical issues in the foreign exchange (FX) market.
#Foster improvements in risk management in the FX market by offering recommendations and guidelines.
#Support actions that facilitate greater contractual certainty for all parties active in foreign exchange.




Also known as a Forward foreign exchange contract, or a Foreign exchange forward.


== See also ==
== See also ==
* [[Federal Reserve Bank]]
* [[Hedging]]
* [[FEOMA]]
* [[Non-deliverable forward]]
* [[Foreign exchange]]
* [[Synthetic]]
* [[FX Global Code]]
* [[FXJSC]]
* [[ICOM]]
* [[IFEMA]]
* [[IFXCO]]
* [[ISDA]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 17:23, 19 November 2012

A transaction which solely involves the exchange of two different currencies: 

(i) on a specific future date
(ii) at a fixed foreign exchange rate which is pre-agreed at the outset of the contract.

Foreign exchange forward contracts are used - among other purposes - for hedging forward foreign exchange exposures. For example known or likely future currency receivables and payables.

They are priced by adjusting the spot foreign exchange rate to reflect the interest rate differential between the two currencies involved for the forward period.


Also known as a Forward foreign exchange contract, or a Foreign exchange forward.

See also

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