The foreign exchange (FX) spot transaction is the simplest form of a currency transaction. It is used when a buyer and a seller wish to execute a transaction against immediate cash and delivery at the current market value (“on the spot”).
How are these FX transactions used in companies?
Companies use spot transactions mainly to buy foreign currency in order to make immediate payments or to exchange foreign currencies into the local currency. Thereby, the exchange rate is fixed immediately. Unlike a transfer between two different currency accounts, a real-time rate is applied to a foreign exchange transaction. The settlement period for spot transactions is usually two days (T+2) from the date of entering the transaction.
To hedge the exchange rate to a future date, it is possible to enter an FX forward contract.
Example of a EUR/CHF FX spot transaction
The company ABC needs EUR to purchase components for the manufacturing of its products in the EU area. As the company has no EUR income from current business, a EUR/CHF foreign exchange transaction is concluded.
In which currencies can FX transactions be concluded?
Foreign exchange transactions can be made in all currencies in which payments are executed. At AMNIS we offer transactions in more than 40 currency pairs.
Where do I find the current exchange rate for spot transactions?
The FX rates displayed on common financial information platforms are ususally spot prices. On the AMNIS website you can also find the current exchange rates of the most important currency pairs.