Can the sterling value be fixed by means of a forward foreign exchange contract?

You can protect yourself using forward foreign exchange contracts and currency options.

But unlike a forward foreign exchange contract, you're not obliged to buy or sell the currency at the end of the period.

One way to hedge against exchange rate movements is to arrange a forward foreign exchange contract.

Exporters can hedge against the risk of adverse exchange rate movements by using a forward foreign exchange contract.

Buying currency options is a more flexible form of hedging than setting up a forward foreign exchange contract - but it's also more expensive.

Forward foreign exchange contracts are a secure and simple way of hedging when you're confident your deal will go ahead and the currency will be required.

Two types of hedging are discussed in this guide - see the pages in this guide on forward foreign exchange contracts, and buying currency options.

The scandal came to light when VW's banking partners, including the National Bank of Hungary, refused to honor forward foreign exchange contracts, alleging they were forged.

The company provides same day, spot and forward foreign exchange contracts to FTSE-listed companies, financial institutions, SMEs, government and non-profit organisations.

Forward foreign exchange contracts can be arranged through all the major UK clearing banks or independent foreign exchange dealers and can be tailored to meet your specific requirements.