Compute a currency forward price from spot and interest rates.
Please do not make financial decisions based on these results.
What is the Currency Forward Calculator?
Compute a currency forward price from spot and interest rates. To use the Currency Forward Calculator, enter spot rate, domestic rate, foreign rate, years, notional amount; it returns forward rate, forward value of notional, and shows them instantly as you type.
Where the Currency Forward Calculator fits
Compute a currency forward price from spot and interest rates. The main figure it returns is the Forward rate, worked out from the values you enter.
It belongs with the other macroeconomics tools. If you are comparing options or checking a result from another angle, try the Interest Rate Parity Calculator, Carry Trade Calculator or the Inflation Rate Calculator.
How to use the Currency Forward Calculator
- Fill in the fields. You will need Spot rate, Domestic rate (%), Foreign rate (%), Years, Notional amount (foreign). Use real figures from your own records where you can. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Forward rate, and the cards below show Forward value of notional. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Currency Forward Calculator using the default values shown in the calculator above:
Inputs
| Spot rate | 1.08 |
|---|---|
| Domestic rate (%) | 4.3 |
| Foreign rate (%) | 2.1 |
| Years | 0.5 |
| Notional amount (foreign) | 1,000,000 |
Results
| Forward rate | 1.0919 |
|---|---|
| Forward value of notional | $1,091,945.58 |
With these inputs the calculator returns Forward rate: 1.0919. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Spot rate from 1.08 to 1.3 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Forward rate | 1.0919 | 1.3144 | +20.4% |
| Forward value of notional | $1,091,945.58 | $1,314,378.94 | +20.4% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Currency Forward Calculator reports Forward rate and forward value of notional. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
When are forwards used?
To lock in an exchange rate for a future payment or receipt.
What is the spending multiplier?
It is 1 divided by one minus the marginal propensity to consume, so an MPC of 0.8 gives a multiplier of 5.
Where do the economic inputs come from?
Use official sources such as the BEA, BLS, Federal Reserve, IMF or World Bank for GDP, CPI, unemployment and money supply figures.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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