HSBC has the expertise to help you with all your Treasury forecasting and risk management needs. We provide comprehensive foreign exchange services to corporate and institutional clients in Spot, Forward, and Currency options. We work on helping you find the best solutions to hedge currency exposures ranging from emerging to G7 currencies.
Spot Contracts
A spot contract is a binding obligation to buy or sell a certain amount of foreign currency at the current market rate, for settlement in two business days time. To enter into a spot deal you advise us of the amount, both currencies involved and which currency you would like to buy or sell.
Key features and benefits:
- Wide range of currencies
- Benefit from favourable movements in the spot rate until the deal is done
- Unprotected against unfavourable movements in the spot rate until the deal is done
Forward Exchange Contract
A Forward Exchange Contract is the simplest method of covering exchange risk, without having to worry whether the spot market is going to move against you. This enables you to budget at a guaranteed rate of exchange.
Key features and benefits:
- Protection against adverse movements in exchange rates
- A binding obligation to deal at a specific rate
- No upfront cost involved
Pricing
The price of a forward contract is based on the spot rate at the time the deal is booked, with an adjustment, which represents the interest rate differential between the two currencies concerned.
