Forex Forward Rate Calculator
Estimate a theoretical FX forward rate and forward points from an entered spot quote, two simple annual interest rates, tenor and explicit day-count bases. The calculator uses quote currency per one base currency and does not present the result as a dealer quote, tradable price or exchange-rate forecast.
Enter one parity-forward scenario
Keep the spot quote, base and quote currencies, tenor and rate conventions aligned. Enter annual simple rates, not APYs or continuously compounded yields.
Entered parity-forward estimate
Entered FX Forward Planning 1.0.0
On smaller screens, scroll horizontally to inspect the audit notes.
| Audit item | Entered or derived basis |
|---|
How the theoretical forex forward rate is calculated
Base growth = 1 + base annual rate × tenor days ÷ base day basis
Theoretical forward = spot × quote growth ÷ base growth
Forward pips = (theoretical forward − spot) ÷ entered pip size
The quote convention is locked as quote currency per one unit of base currency. For EUR/USD at 1.1000, EUR is the base currency and USD is the quote currency. Reversing the quote without also reversing the rate roles changes the calculation.
Covered interest parity links spot and forward exchange rates to comparable funding returns over the same term. Version 1.0.0 applies simple annual rates independently on an entered 360- or 365-day basis so the compounding and day-count assumptions remain visible.
The quote-currency rate belongs in the numerator because one unit of base currency bought at spot requires quote-currency funding. The base-currency rate belongs in the denominator because the base amount grows during the same term. Both growth factors must remain positive.
Forward price points equal the theoretical forward rate minus spot. The pip output divides that difference by an explicit entered pip size; the page does not infer pips from a pair name, symbol digits or an assumed 100,000-unit contract.
The optional base-currency notional translates the spot and theoretical forward rates into comparable quote-currency amounts. It does not calculate margin, cash settlement, profit, transaction cost, tax or a broker-defined lot value.
A parity difference is not a directional forecast. It can primarily reflect the entered funding-rate difference. Actual dealer forwards can also incorporate market conventions, bid-ask spreads, credit, liquidity, collateral and cross-currency basis.
Worked example from the audited fixture
The audited fixture enters EUR/USD spot at 1.10000, a 5% USD quote-currency rate, a 3% EUR base-currency rate, 180 days, 360-day bases, a 0.0001 pip and EUR 100,000 notional.
- The quote growth factor is 1.025 and the base growth factor is 1.015. Spot multiplied by 1.025 and divided by 1.015 gives a theoretical forward rate of 1.11083743842.
- Forward price points are +0.01083743842, equal to +108.3744 entered pips. The optional forward quote amount is USD 111,083.74, versus USD 110,000.00 at the entered spot.
Reproduce it: select “Load audited example” above. The immutable fixture is recomputed from the disclosed equation rather than copied from a provider result.
How to interpret the result
- Read a positive forward-points result as a theoretical forward rate above the entered spot under these rate conventions. Do not label it bullish, profitable or expected.
- Confirm that both annual rates cover the same credit quality, maturity and valuation context. A retail deposit rate and an institutional borrowing rate are not automatically comparable inputs.
- Check whether the source quotes money-market simple rates, effective annual yields or compounded curve rates. Convert only from a verified convention; do not paste unlike rate bases into one parity equation.
- Use the entered pip output for communication only after confirming the pair’s pip convention. Metals, indices, cryptocurrencies and nonstandard symbols can use different tick, point and informal pip definitions.
- Compare the theoretical result with an actual forward quote only after recording the dealer side, bid or ask, value date, settlement type, fees and quote convention. A difference is not automatically an arbitrage opportunity.
- For a real exposure, carry the verified executable forward rate into the Currency Forward Hedge Calculator. Do not use this theoretical result as a substitute for a firm quote.
Assumptions and limits
- No live spot quote, interest-rate curve, dealer price, broker account, bank account, contract, order or settlement system is connected.
- Version 1.0.0 uses simple annual rates. Continuous compounding, periodic compounding, zero curves, interpolation and bootstrapped discount factors are excluded.
- Bid-ask spreads, asymmetric borrowing and lending rates, cross-currency basis, credit, collateral, funding availability, liquidity and transaction costs are excluded.
- The tenor is a whole calendar-day count. Business-day adjustments, spot lags, holidays, broken dates, end-of-month rules and currency-specific market conventions are excluded.
- Deliverable versus non-deliverable settlement, fixings, capital controls, taxes, legal eligibility, documentation and counterparty limits are not assessed.
- No currency, forward tenor, interest rate, hedge, provider, broker, direction, strategy or trade is recommended.
Which FX forward calculator answers which question?
These pages share one governed visual shell but keep three decisions separate. The rate calculator estimates a frictionless parity rate, the hedge calculator compares one partial-hedge cash-flow scenario, and the value calculator approximates a normal quote-currency replacement value for an existing contract. Separating them prevents a theoretical rate from becoming an executable quote, a scenario benefit from becoming an optimal hedge claim, or a replacement value from becoming accounting fair value.
| Tool | Primary input | Primary output | Hard boundary |
|---|---|---|---|
| Forward Rate | Spot, two rates and tenor | Theoretical parity rate and points | No executable quote or forecast |
| Forward Hedge | Exposure, hedge share and two entered rates | One partial-versus-unhedged scenario | No optimal hedge decision |
| Forward Value | Contract and same-maturity replacement rates | Normal quote-currency present-value estimate | No dealer closeout or accounting fair value |
Frequently asked questions
- It multiplies the entered spot rate by the quote-currency simple growth factor and divides by the base-currency simple growth factor for the same entered tenor.
- Every rate is quote currency per one unit of base currency. For EUR/USD, EUR is base and USD is quote, so the USD rate is in the numerator.
- No. No dealer, broker, spot feed, yield curve or executable price is connected. The result is frictionless entered arithmetic.
- No. A forward premium or discount can reflect the entered funding-rate difference and is not an exchange-rate forecast or trading signal.
- Money-market rate conventions can differ. The calculator exposes each rate basis so unlike conventions are not silently treated as identical.
- Forward price points equal theoretical forward minus spot. The page divides that amount by the explicit entered pip size and never infers pips from a symbol name.
- The model accepts finite negative rates only while each entered simple growth factor remains positive over the selected tenor.
- Bid-ask spreads, borrowing-lending differences, cross-currency basis, credit, collateral, liquidity, capital controls, holidays, broken dates, tax and dealer fees are excluded.
Sources and methodology
- Bank for International Settlements — Covered Interest Parity — Primary reference for the parity relationship and transaction, counterparty and market-friction boundaries.
- International Monetary Fund — Covered Interest Parity — Primary reference for the spot-forward interest relationship and transaction-cost qualification.
- Infront — FX Forward Calculator — Professional workflow reference for forward points, value dates, day count and broken-date complexity.
Version 1.0.0 performs deterministic local arithmetic and uploads no entered value. Sources define parity, valuation structure and professional-market boundaries; they do not verify an input, contract, provider quote or result.
Carry the entered rate into a controlled workflow
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Calculator outputs do not replace current broker or provider disclosures. Verify the exact entity, account, symbol, pricing, settlement, margin and execution terms available in your jurisdiction before opening or funding an account.
Risk and affiliate disclosure: Leveraged forex and CFD trading can result in substantial losses. Entered forward-rate, hedge and contract-value scenarios do not predict markets, establish executable prices, determine suitability or provide accounting fair value. These are affiliate links, so ForexMT4Indicators.com may receive compensation if you register or trade through them, at no additional cost to you. Availability and terms vary by jurisdiction and entity.