Forward points and Association for Financial Markets in Europe: 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.
''Wholesale financial markets - associations & federations.''


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.
(AFME).


The AFME represents the leading global and European banks and other significant capital market players.


<span style="color:#4B0082">'''Example: Full forward quote calculation'''</span>
It aims to act as a bridge between market participants and policy makers across Europe.


If the spot foreign exchange quote is:
''(Source - AFME)''


GBP 1 = 1.6000 - 1.6010 USD
And if one-month forward points are 5-8 (rising):


== See also ==
* [[Bridge]]
* [[Capital market]]
* [[Capital Market Union]]  (CMU)
* [[European Banking Federation]]
* [[European Covered Bond Council]]
* [[European Fund and Asset Management Association]]
* [[European Mortgage Federation]]
* [[Financial markets]]
* [[Global Financial Markets Association]]
* [[Global Sustainable Finance Council]]
* [[Institute of International Finance]]
* [[International capital market]]
* [[International Capital Market Association]]
* [[Loan Market Association]]
* [[Market participant]]
* [[Regulation]]
* [[Securities Industry and Financial Markets Association]]
* [[Wholesale]]
* [[World Federation of Exchanges]]


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


1.6000 + 0.0005
==External link==


= 1.6005 USD
*[https://www.afme.eu/About-Us/Introducing-AFME AFME - Who we are and how we work]
 
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 ==
* [[Forward contract]]
* [[Foreign exchange]]
* [[Forward foreign exchange rate]]
* [[Spot rate]]
* [[Swap points]]


[[Category:Manage_risks]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_products_and_markets]]
[[Category:The_business_context]]

Revision as of 19:27, 12 September 2023

Wholesale financial markets - associations & federations.

(AFME).

The AFME represents the leading global and European banks and other significant capital market players.

It aims to act as a bridge between market participants and policy makers across Europe.

(Source - AFME)


See also


External link

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