Financial Information
What factors influence the spot and forward exchange rates in the forex market?
Question : What factors influence the spot and forward exchange rates in the forex market?
Basically an understanding of what goes behind the decisions of selecting to go for a spot rate of exchange or a forward rate of exchange.
forex exchange
Best answer:
Answer by FC
They depend on the interbank interest rates of the 2 currencies
at the time of the deal is booked.
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#2 written by Alex 1 year ago
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Spot is now and immediate and there is no time factor involve. You like the rate you deal on the spot. Pun intended.
Forward contract is to locked in a price for a period in time. There is a premium added to it on the spot rate. Its kind of an insurance. You use it when you cannot decide immediately whether you will transact or not but want a comfort to know that today’s price will still be there for you. Of course you have to pay a cost for that
If it helps at all visit http://www.geocities.com/lcming/ForexForex