Forward contracts allow you to lock in an exchange rate on a particular amount of currency for a future transaction within a defined period of time. This lets you plan ahead with the peace of mind of knowing what your rate will be when you’re ready to make your transaction.
How does it work? Basically, it starts with a conversation – about your goals, the amount you need to spend and the timeline involved. We’ll discuss trends in the marketplace, pros and cons to be aware of, and your personal risk tolerance to develop a strategy that works for you.
For instance, if you’re buying real estate abroad and want to eliminate the risk of foreign exchange rates impacting the cost of the property, a forward contract can be used to fix that exchange rate for use at a future date. We lock in the amount, the exchange rate, and the period of time that the transaction will be exercised, while you turn your attention to other matters. It’s like a layaway plan for your international payments.
For more information, download our Forward Contract Fact Sheet, or talk to our market experts to see if forward contracts are right for you.
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