foreign currency future

Foreign Currency Future

A futures contract in which the underlying asset is a currency. Two parties agree to buy and sell a certain currency at a given exchange rate with respect to another currency at some point in the future. The market for currency futures contracts is important in estimating the future value of different currencies.

foreign currency future

A contract for the delivery of a specified amount of a foreign currency. A U.S. business selling products in Germany may decide to sell futures contracts on the euro in order to guarantee an exchange rate of the euro to dollars on a specific date.