Foreign Exchange

HSBC has the expertise to help you with all your Treasury forecasting and risk management needs. We provide comprehensive foreign exchange services to corporate and institutional clients in Spot, Forward, and Currency options. We work on helping you find the best solutions to hedge currency exposures ranging from emerging to G7 currencies.

Spot FX

A spot contract is a binding obligation to buy or sell a certain amount of foreign currency at the current market rate, for settlement today (T), tomorrow (T+1) or on the value date (T+2). To enter into a spot deal you advise us of the amount, both currencies involved and which currency you would like to buy or sell.

Key features and benefits:

•  No minimum deal size
•  Wide range of currencies
•  All-in two-way pricing
•  Minimises cost on every FX transaction
•  No HSBC current account required to trade FX
•  All trades are done over a recorded telephone line or by means of HSBC FXnet

Forward

A Forward Exchange Contract is the simplest method of covering exchange risk, without having to worry whether the spot market is going to move against you. This overcomes one of the problems that you can experience when importing or exporting in a foreign currency, as you can now budget at a guaranteed rate of exchange.

A Forward Exchange Contract is a binding obligation to buy or sell a certain amount of foreign currency at a pre-agreed rate of exchange, on a specified date in the future. To take out a forward contract you need to advise us of the amount, both currencies involved, the maturity date and which currency you would like to buy or sell on the maturity date.

Pricing

The price of a forward contract is based on the spot rate at the time the deal is booked, with an adjustment which represents the interest rate differential between the two currencies concerned.

Key features and benefits:

•  Protection against movements in exchange rates
•  A binding obligation to deal at a specific rate
•  No upfront cost involved
•  No HSBC current account required to trade FX