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The latest markets news, real time quotes, financials and more. What is the ‘Forex Spot Rate’ The forex spot rate is the current exchange rate at which a currency pair can be bought or sold. BREAKING DOWN ‘Forex Spot Rate’ The forex spot rate is the most common transaction in the forex market, more so than an FX forward and FX swap. 5 trillion, which makes it bigger than both the equity and bond market.
2 days, which is where there is no adjustment for interest rate differentials. Should a counterparty wish to delay delivery, they will have to take out a forward contract. USD trade is executed at 1. 1550, this will be the rate at which the currencies are exchanged on the spot date.
However, say European interest rates are lower than they are in the U. Although the forex spot rate calls for delivery within two days, this rarely occurs in the trading community. Traders that hold a position for longer than two days will have their trades “reset” by the broker, i. However, when these currencies are rolled there will be a premium or discount attached, depending on the difference in interest rates, via the short term FX swap. Because the spot rate is the rate of delivery with no adjustment for interest rate differential, it is the rate quoted in the retail market.