A forex forward transaction involves the exchange of two currencies not today, but at a previously fixed date in the future. One speaks of a forward transaction if there are at least three days between the conclusion of the transaction and the exchange rate. The currencies, amount, forward rate and fulfilment date are fixed in the forward contract.

The forward rate is calculated from the current spot rate and the interest differential between the two currencies in question. If euro interest rates are higher than the rates in the foreign currency, there is a discount. The forward rate is lower than the spot rate. If the euro interest rates are lower than the corresponding rates in the foreign currency, there is a premium. The forward rate is higher than the current spot price.

In a forex forward transaction both counterparties have obligations that they must fulfil on the maturity date. The exchange rate is fixed on the conclusion of a forward contract. The parties can no longer profit from future market movements.