Brief introduction of forward foreign exchange trading function
The function of forward foreign exchange trading is hedging. This comrade upstairs has explained the hedging business in detail, so I won't explain it here. Explain the specific transaction process in vernacular. If Japanese companies and American companies signed a contract to export a batch of goods in April, 201/,and the contract will be implemented from today, we can short the US dollar in the US-Japan currency pair because we are afraid of the risk of profit loss caused by the depreciation of the US dollar during the period from product production to export date, so that even if the US dollar depreciates, we can make up for the loss caused by the decline of the US dollar in the foreign exchange market. On the contrary, if the dollar appreciates, we will lose money in the money market, but the dollar we export will be more valuable.