FX Forward Pricing Calculator

Inputs

Enter rates as decimals (e.g., 0.05 = 5%).

Base currency

Quote currency

Spot rate (quote per 1 base)

Domestic rate (quote)

Foreign rate (base)

Compounding

Tenor value

Tenor unit

Day count basis

Notional (base currency)

Contract rate (optional)

Position

As-of date

Reset

Engineering note: The forward rate is derived from no-arbitrage parity using domestic and foreign discounting.

Example data

Use this as a quick validation set.

Pair	Spot	rd	rf	Tenor	Basis	Comp	Fair F (approx.)
EUR/USD	1.085000	0.0450	0.0300	90 days	ACT/365	Simple	~1.088990
GBP/USD	1.270000	0.0500	0.0400	6 months	ACT/365	Continuous	~1.276366
USD/JPY	148.200000	0.0120	0.0020	1 year	ACT/360	Simple	~149.676000

Approximate values depend on basis and rounding.

Formula used

This calculator prices an FX forward using interest rate parity (no-arbitrage).

Simple compounding

F = S × (1 + r_d·T) / (1 + r_f·T)

Continuous compounding

F = S × e^{(r_d − r_f)·T}

Mark-to-market value (domestic / quote currency)

V = N × (S·DF_f − K·DF_d)

Where DF_d and DF_f are domestic and foreign discount factors, K is the contract rate, and N is base notional.

How to use this calculator

Choose base and quote currencies for your FX pair.
Enter the spot rate as quote per one unit of base.
Provide annual domestic and foreign interest rates as decimals.
Set tenor, unit, and day-count basis to get the year fraction.
Select compounding style to match your internal convention.
Optionally enter a contract rate to compute mark-to-market.
Press Calculate, then export results as CSV or PDF.

Insights

Forward pricing aligns cashflows across currencies

FX forwards convert future foreign-currency exposures into a known domestic outcome. In practice, include bid-ask spreads, credit charges, and settlement calendars in a full dealing workflow, but the parity rate remains the benchmark for engineering estimates, hedge effectiveness testing, and identifying data-entry errors before they propagate into cost forecasts. The fair forward rate comes from matching the domestic value of buying the base currency today, investing it at the foreign rate, and selling it forward versus keeping funds domestically. This parity view is widely used for project procurement, energy contracts, and cross-border engineering services where milestones settle in different currencies.

Interest rate parity is the core no-arbitrage rule

With simple compounding, the calculator uses F = S × (1 + r_dT) / (1 + r_fT). With continuous compounding, it uses F = S × e^{(r_d − r_f)T}. For short tenors, both conventions are close; for longer tenors, convention consistency matters. Use the same curve style your treasury or pricing policy mandates.

Day-count choice changes the year fraction and price

The year fraction T converts days or months into an annualized horizon. ACT/365 and ACT/360 are common bases; switching bases changes T, which shifts forward points. In operational settings, always document the basis in calculations so audits and handovers can reproduce the result without hidden assumptions.

Discount factors support transparent valuation checks

For a contracted forward rate K, the mark-to-market value is V = N × (S·DF_f − K·DF_d) in the quote currency, where N is base notional. This representation is useful for engineering cost control because it separates spot exposure, carry, and discounting into traceable components that can be compared against internal curves.

Sensitivity review helps reduce budget surprises

Forward points typically widen as the domestic rate rises relative to the foreign rate. The interactive chart samples tenors around your input so you can see how the forward rate evolves with time. Use it to stress-test procurement schedules: a shift from 90 to 180 days can materially change the forward points when rate differentials are large.

Exports improve traceability for project documentation

The CSV export captures inputs and computed metrics for spreadsheets, while the PDF output is suitable for sign-off packs with consistent rounding rules. Store exported files alongside the contract, approvals, and market data snapshot used for pricing. This improves repeatability, supports governance, and shortens review cycles in multi-stakeholder engineering programs.

FAQs

What does “domestic” and “foreign” mean here?

Domestic is the quote currency of the pair, while foreign is the base currency. Rates should match those currencies and the tenor used.

Should I enter rates as percentages or decimals?

Enter decimals. For example, 5% should be entered as 0.05. This keeps formulas consistent across different rate conventions.

Why do my forward points look negative?

If the foreign rate exceeds the domestic rate, the forward rate can be below spot, creating negative forward points. That is normal under parity.

When should I use continuous compounding?

Use it if your curves or internal policy quote continuously compounded rates. Otherwise, keep simple compounding for money-market style inputs.

What does the mark-to-market value represent?

It is the present value of the forward position in the quote currency, discounted to today using the selected rate convention and tenor.

Can I price a fair forward without a contract rate?

Yes. Leave the contract rate empty and the calculator treats the forward as fair, returning the no-arbitrage forward rate and points.