Reduce your risk with a currency forward
Currency brokers can lock in a favourable exchange rate for settlement up to a year in advance on a “buy now pay later basis” with a currency forward contract.
Using currency forward contracts can help predict cash flow and futures costs without the worry of currency prices moving against you.
For example you have £12m to convert into EUROs over the course of a year (£1m a month), but are worried that the exchange rate may move against you, therefore reducing the amount EUROs you receive as time goes on. We can convert £12m up front and split it into 12 different settlement dates a month apart. A small...