Exporters can hedge against the risk of adverse exchange rate movements by using a forward foreign exchange contract. You agree to sell the bank a particular foreign currency at a fixed future date for a price that is set now.
A financial transaction in which two counterparties agree to trade foreign exchange at a specified price at a specified future date. The AOFM undertook forward foreign exchange contracts with the Reserve Bank of Australia to alter the level of foreign currency exposure in the Commonwealth debt portfolio.
an agreement between two parties to set exchange rates in advance.