Forward points and Member-administered closed user group: Difference between pages

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


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.
Companies can gain direct access to SWIFT via a MA-CUG sponsored by their bank.
However, unlike SCORE, a company can only communicate with its sponsoring bank.  


 
<span style="color:#4B0082">'''Example: Full forward quote calculation'''</span>
It has to join a MA-CUG for each bank with which it wants to communicate.
 
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.
 
 
''It is also often possible for a customer to construct a forward FX contract, by dealing separately in the spot FX contract and the swap points.''




== See also ==
== See also ==
* [[Forward contract]]
* [[Member]]
* [[Foreign exchange]]
* [[Payments and payment systems]]
* [[Forward foreign exchange rate]]
* [[Standardised corporate environment]] (SCORE)
* [[Spot rate]]
* [[Society for Worldwide Interbank Financial Telecommunications]] (SWIFT)
* [[Swap points]]


[[Category:Manage_risks]]
[[Category:Cash_management]]

Latest revision as of 05:37, 27 June 2022

(MA-CUG).

Companies can gain direct access to SWIFT via a MA-CUG sponsored by their bank.

However, unlike SCORE, a company can only communicate with its sponsoring bank.


It has to join a MA-CUG for each bank with which it wants to communicate.


See also