Forward Contracts

Forward contracts give you peace of mind when you know you need to exchange currency in the future. By locking in a rate now, even though the actual transaction won't take place until a later date, you can be sure of the cost of your purchased currency before you actually need it.

Perhaps you are moving overseas or about to finish an expat contract and move home in a few months time? Or perhaps you have made a large international purchase but don't have to pay until you receive delivery? What if exchange ranges change between now and then?

Lock in a Future Exchange Rate Today

With a ClearFX forward contract you can lock in an exchange rate immediately without having to pay for the purchased currency until a future date. It's is quick and easy to arrange online.

The forward exchange rate is calculated by using the current exchange rate and interest rates for the two currencies and the time or length of the contract. You pay a 10% deposit now but do not pay the balance until the settlement date.

Forward Contract Example

Jen's expat contract in London finishes at the end of this year. She has made a significant down payment on an apartment in her home town Vancouver. The final payment of CAD$300,000 is due in 3 months time.

If Jen made that payment at today's exchange rate of 0.6000 she would only have to pay GBP 180,000.
However if the CAD/GBP rate increases 10% over the next three months to 0.6600, Mary will have to pay GBP 198,000. This exchange rate movement would cost Jen an extra GBP 18,000.
Jen decides she does not want to take that risk. With ClearFX it is simple to lock in an exchange rate today that will be used for the money transfer in 3 months. Jen books a forward contract with ClearFX at 0.6050 to buy CAD$300,000 for GBP 181,500. This exchange contract is binding on both parties. Jen pays a 10% deposit to arrange this.
Just before the 3 months passes, Jen transfers the GBP 163,350 (GBP 181,500 minus the 10% deposit already paid) to ClearFX by Electronic Funds Transfer (EFT). ClearFX pays CAD$300,000 to Jen's Canadian bank account.
There are no fees and no hidden costs. With her fx forward contract Jen has complete certainty during the 3 month wait and regardless of how international exchange rates might move in that period, the forward rate stays the same.