A forward locks in an exchange rate for a future date. The currency with the higher interest rate trades at a forward discount, so no one can earn risk-free profit by borrowing in one currency and lending in another.
How to use the Currency Forward Calculator
- Spot rate (quote per base)
- Interest rate – quote currency
- Interest rate – base currency
- Days to delivery
- Day count
- Amount in base currency
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the spot rate (quote currency per 1 unit of base currency), the interest rates in each currency and the number of days.
Tips
- Use real (inflation-adjusted) figures to compare across years.
- Check whether data are seasonally adjusted.
- Use the same currency and base year throughout.
- Economic models simplify reality – treat results as illustrations, not forecasts.
Common mistakes to avoid
- Mixing nominal and real values.
- Comparing percentage changes with percentage-point changes.
- Treating correlations as causes.
Inputs explained
| Field | What to enter |
|---|---|
| Spot rate (quote per base) | A number |
| Interest rate – quote currency | In % |
| Interest rate – base currency | In % |
| Days to delivery | A number |
| Day count | Choose one: Actual/360, Actual/365 |
| Amount in base currency | Amount in your currency |
What each result means
- Forward rate = [Spot rate (quote per base)]×(1 + [Interest rate – quote currency]÷100×[Days to delivery]÷[Day count])÷(1 + [Interest rate – base currency]÷100×[Days to delivery]÷[Day count])
- Forward points = ([Forward rate] – [Spot rate (quote per base)])×10000
- Annualized premium (+) or discount (−) = ([Forward rate]÷[Spot rate (quote per base)] – 1)×[Day count]÷[Days to delivery]×100
- Amount in quote currency at the forward rate = [Amount in base currency]×[Forward rate]
Example values
How the main result changes when Spot rate changes and everything else stays at the example values above:
| Spot rate (quote per base) | Forward rate |
|---|---|
| 0.5425 | 0.5452 |
| 0.8138 | 0.8178 |
| 1.09 | 1.0904 |
| 1.36 | 1.363 |
| 1.63 | 1.6356 |
| 2.17 | 2.1808 |
Formula
Forward = spot × (1 + i_quote × d/360) ÷ (1 + i_base × d/360)Forward points = (forward − spot) × 10,000Premium (annualized) = (forward ÷ spot − 1) × 360 ÷ dWorked example
Inputs — Spot rate (quote per base): 1.085; Interest rate – quote currency: 4.25 %; Interest rate – base currency: 2.25 %; Days to delivery: 90; Day count: Actual/360; Amount in base currency: $100,000.
Results — Forward rate = 1.09039; Forward points = 53.9; Annualized premium (+) or discount (−) = 1.989 %; Amount in quote currency at the forward rate = 109,039.47.
Frequently asked questions
What is a currency forward?
A contract to exchange currencies at a fixed rate on a future date.
How is the forward rate calculated?
From the spot rate and the interest rate differential.
Why is the forward rate different from spot?
It reflects the difference in interest rates between the currencies.
What formula does the Currency Forward Calculator use?
Forward = spot × (1 + i_quote × d/360) ÷ (1 + i_base × d/360).