What is foreign exchange?
Foreign exchange refers to the buying or selling of currencies between two parties. It’s how one currency is converted to another for international transactions. Exchange rate fluctuations can expose you to financial risk when buying or selling products or services in another country. This risk can impact your profitability, for example if you:
- Have customers in the US or other countries
- Have procurement contracts with foreign suppliers
- Buy equipment that requires payment in foreign currency
- Deal in commodities priced in US dollars
With our expertise and hedging tools, you can effectively manage these risks and protect your business’s profitability.
Foreign exchange contracts
A foreign exchange contract is an agreement between two parties to purchase or sell currencies at a predetermined exchange rate at a future date. It helps protect your business against foreign currency fluctuations.
Spot contracts
A spot contract lets you buy or sell a currency immediately (within 2 business days) at the current exchange rate. This option allows you to take advantage of a favourable rate for an immediate transaction.
Forward contracts
A forward exchange contract lets you lock in a rate for a future currency purchase or sale. It can be fixed (set for a specific date) or open (span a period of 30 days or more).
Benefits
- Guaranteed exchange rate: Set your rate in advance.
- Protection against currency fluctuations: Shield your accounts receivable from volatility.
- Simplified pricing: Know exchange rates in advance.
- Stabilization of foreign currency debt: Secure the value of debts in foreign currencies if the Canadian dollar weakens.
- Wide range of currencies: Access multiple currencies for transactions starting at $20,000.
Currency swaps
A currency swap involves the simultaneous buying of one currency and selling of another, but with different settlement dates.
Benefits
- Optimized cash flow: Efficiently handle accounts receivable and payable in the same currency on different dates.
- Wide range of currencies: Access multiple currencies for transactions starting at $20,000.
Currency options
Currency options give you the right to buy or sell currencies at a set rate and by a specific date, but without any obligation. You may need to pay a premium, depending on the exchange rate, type of option, expiration date and market volatility.
Benefits
- Opportunity for profit: Benefit when exchange rates shift in your favour and stay protected when the opposite occurs.
- Wide range of currencies: Access multiple currencies for transactions starting at $100,000.
Our foreign exchange services
Our dedicated team of FX traders is here to guide you. We’ll work closely with you to understand your needs and develop foreign exchange risk management strategies that are right for your business.
Benefits
- More direct access to the market, free of charge
- Personalized advice for using derivatives
- Expertise in currency hedging strategies
- Daily updates on market developments
- Rate alerts via phone when the market reaches your desired exchange rate
- Firm orders available