Forward points: Difference between revisions
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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. | 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. | ||
For example if the spot foreign exchange quote is GBP 1 = 1.6000 - 1.6010 USD; | For example | ||
if the spot foreign exchange quote is | |||
GBP 1 = 1.6000 - 1.6010 USD; | |||
And the one-month forward points are 5-8 (rising); | And the one-month forward points are 5-8 (rising); | ||
Then the one-month forward exchange quote is GBP 1 = 1.6005 - 1.6018 USD. | |||
Then the one-month forward exchange quote is | |||
GBP 1 = 1.6005 - 1.6018 USD. | |||
Revision as of 09:26, 22 November 2014
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.
For example
if the spot foreign exchange quote is
GBP 1 = 1.6000 - 1.6010 USD;
And the one-month forward points are 5-8 (rising);
Then the one-month forward exchange quote is
GBP 1 = 1.6005 - 1.6018 USD.
