FX forward
An agreement to buy or sell currency at a rate agreed today for a date in the future.
How to read the number
It closes the currency risk of a contract: an importer knows the price of the currency in advance and stops depending on the rate at the payment date.
When the metric lies
The obligation runs both ways: if the rate moves in the holder's favour the gain cannot be taken. An over-the-counter forward adds the risk of the counterparty itself.
Also known as: currency forward