Mike Gas

As best as I can.
Spot Rate Today’s exchange rate for funds transferred and completed today

Forward Contract, a date set by you for any think up to two years away with rate set today aprox 2 / 10 % lower than spot rates requires a 10 % deposit than 90 % on completion date

Mick

Big Face

The current Interbank Forward prices for GBP/CAD (at time of writing) are approx:

1 mth: -0.0044
3 mth: -0.0126
6 mth: -0.0257
9 mth: -0.0381
1 yr: -0.0493
18mth: -0.673
2 yr: -0.826

Current Spot Price: 2.3872

The above forward points would be taken OF the spot price.
Eg: 1 year GBP/CAD would be sold at 2.3379 (Spot 2.3872 - 0.0493 forward adj)


The price is adjusted DOWN due to the approx differential in GBP (4.75 %)and CAD (2.50 %)interest rates, and reflect the difference in interest earned for the duration of the deal eg: Spot - 1 year

Basically, because the deal is not going to be "settled" untill a years time, you would be able to keep your GBP in a Bank A/C and earn interest of approx 4.75% untill the forward settlement date. Conversely, the person who is selling you the CAD, will only earn approx 2.5%. So to compensate/allow for this differance the price is moved DOWN.

(If you were selling GBP against a higher yielding currency eg AUD or NZD the forward price would be adjusted HIGHER.)

As stated, the above prices are the Interbank prices. I do not know how much the Currency provider eg. HIFX, Currency Direct, Travelex etc adjusts the forward price, but the above numbers give some indication of what it SHOULD be.

Cheers