Foreign Exchange Market

HSBC is a leading market maker globally, quoting competitive prices in all tradable currencies, 24 hours a day. The Group trades FX in 75 of our treasury sites worldwide, in 60 countries and territories. We have 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 and Forward markets and work on helping you find the best solutions to hedge currency exposure ranging from emerging markets’ 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, tomorrow and value date.

Key features and benefits:

• No minimum deal size
• No commission for conversion of currencies
• Wide range of currencies
• All dealings are done over the recorded telephone line or by means of HSBC FXnet

Forward Exchange Contract

This 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 contract is a binding agreement to buy or sell a certain amount of foreign currency at a pre-agreed rate of exchange on a specified date in the future. 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
• Opportunity to lock in a specific rate for deals
• No upfront cost involved