Use of Forex Futures
Forex futures are futures markets where the underlying commodity is a foreign currency. Foreign currency futures are essentially the same as all other futures markets (index and commodity futures markets), and are traded in exactly the same way. Forex futures markets trade futures contracts that reflect the exchange rates of two currencies. For example, the most popular currency futures market is the EUR futures market, which is based upon the Euro to US Dollar exchange rate.
Hedging with Forex FuturesTenders make use of the market for forex futures/foreign currency futures in order to hedge their foreign exchange risk. For instance suppose a US importer importing goods from India for 1 million Rupees and he needs this amount for making payment to the exporter.… Read the rest