About this calculator
This calculator is for education only and does not constitute investment advice. A forward exchange rate is not a prediction of where the spot rate will be — it is the price that removes any risk-free profit from borrowing in one currency, converting at spot, investing in the other, and converting back at the forward rate. That no-arbitrage logic is covered interest rate parity, and it is fully determined by today's spot rate and the two interest rates.
When the quote currency's rate is higher, the forward rate sits above spot (a forward premium for the base currency); when it is lower, the forward sits below spot (a discount). The curve table shows the same logic at every tenor from 1 month to 5 years.
How to use it
- Enter the spot rate as quote currency per 1 unit of base currency — for EUR/USD, that is dollars per euro.
- Enter the base currency's annual interest rate and the quote currency's annual interest rate.
- Pick the tenor for the headline result; the table below prices every tenor on the same inputs.
The formula
T is the tenor in years. The formula is the no-arbitrage condition: invest 1 unit of base currency at its rate, or convert to spot × (1 + quote rate × T) units of quote currency and convert back forward — both paths must agree, or a risk-free profit exists. Simple interest is used, the money-market convention for tenors up to a few years; longer tenors in practice use compounding and day-count conventions the model omits. Transaction costs, bid-ask spreads and credit risk are excluded, and none of this forecasts the future spot rate — the market can and does move against the forward-implied path.
Worked example
EUR/USD spot 1.08, euro rate 2%, dollar rate 4%, 1 year: the forward rate is 1.08 × 1.04 / 1.02 = 1.1012 — 211.8 points above spot, a 1.96% annualized premium for the euro. At 3 months on the same inputs the forward is 1.0854, only 53.7 points above spot, because the rate gap has only a quarter of a year to act.
Sources: Covered interest parity, simple interest over the tenor (money-market convention). No live rates are fetched; transaction costs, credit risk and bid-ask spreads are excluded. Last updated: October 2026.
Frequently asked questions
Is the forward rate a forecast?
No — that is the most common misunderstanding in FX. The forward rate is set by interest rates today, not by anyone's view of tomorrow. If the market expected the spot rate to move, that expectation is already in the spot rate and the interest rates, not added on top.
Why multiply points by 10,000?
Convention: one pip is 0.0001 in most pairs, so (forward − spot) × 10,000 expresses the gap in pips. A 211.8-point gap on EUR/USD is 211.8 pips — the unit dealers actually quote.
What if both interest rates are equal?
Then the forward rate equals the spot rate at every tenor: with no rate gap there is no premium or discount. The curve table goes flat, which is the correct no-arbitrage answer, not a missing calculation.
Does leverage matter here?
This page prices forwards; it does not place trades. But anyone trading FX forwards on margin should know the standing warning: leveraged FX losses can exceed the principal deposited, because a small adverse spot move is multiplied by the leverage.
What formula does this forward exchange rate calculator use?
Forward = spot × (1 + quote rate × T) / (1 + base rate × T); forward points = (forward − spot) × 10,000; annualized premium = (forward / spot − 1) / T T is the tenor in years. The formula is the no-arbitrage condition: invest 1 unit of base currency at its rate, or convert to spot × (1 + quote rate × T) units of quote currency and convert back forward — both paths must agree, or a risk-free profit exists. Simple interest is used, the money-market convention for tenors up to a few years; longer tenors in practice use compounding and day-count conventions the model omits. Transaction costs, bid-ask spreads and credit risk are excluded, and none of this forecasts the future spot rate — the market can and does move against the forward-implied path. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.