It can be frustrating having to follow foreign exchange rate movements when you’re changing up your money, whether for business or for pleasure.

What if there was an easier way, where you can instead rely on a trusted brokerage to undertake the time-consuming task of monitoring prices? Even better, what if you could guarantee a fixed price that would remain in place for up to a year?

This is just one example of the services that Accendo FX can provide for you. This report contains further details of how forward contracts can benefit you, as well as other ways to avoid currency risk.

How do fixed prices work?

When you rely on currency exchange, not knowing the daily value of your expenses can be stressful, to say the least.

Why take the added risk of paying your business’ invoices or transferring money abroad at the going market rate, whether attractive or not, when instead you can enjoy the security of Forward Contracts.

Instead of a spot rate, where the current market price is paid for a currency transaction, regardless of future movements, a forward contract guarantees the trade price is held over a given period at a specific value.

For some currencies, this can last up to 12 months and crucially, the price of the forward will not change during the year irrespective of market movements.

How to secure your rate

Forward contracts can be agreed with your Accendo FX broker and guaranteed with a deposit of up to 5% of the trade’s value. This is then attributed to the final settlement when funds are required.

The only obligation of a forward contract is that the trade is settled by the agreed date, regardless of the subsequent market movements.

An example of a forward contract

In recent times, perhaps the best possible example of how a forward contract may benefit you is Brexit.

The surprise result of the EU referendum saw Pound Sterling fall sharply against both the Euro and the US dollar. Should you have used a forward, you may have managed to escape the increased costs.

For example, using a forward contract a trader would have been able to book a specific value of Euros before the referendum at roughly €1.30 per £1.

Subsequently, despite sharp Sterling devaluation, you could have accessed the forward trade at the agreed value at any point over the predetermined time frame, potentially saving you thousands.

Do note, however, should FX markets move in your favour during that period, you are still obligated to complete the forward contract.

How can you avoid further currency risk?

A common strategy when undertaking a large transaction is to book a select percentage of the trade’s cost using a forward, leave the remaining total to a series of spot trades or even further forward trades should the price move in your favour; doing this effectively raises your average price.

Working with Accendo FX, you can navigate the risks FX markets can throw at an individual or business.

Our talented team will help you to secure forward contracts to help alleviate the risks of FX dealing, and will also provide you with crucial information about pivotal events for your chosen currency pairing.

Read on to find out the key events that are set to impact your currency pairing, alongside forecasts City of London analysts are making for Sterling, the Euro and the US dollar. Which is set to outperform?