what is a currency forward contract
DEFINITION of 'Currency Forward'. A binding contract in the foreign exchange market that locks in the exchange rate for the purchase or sale of a currency on a future date.A currency forward is essentially a hedging tool that does not involve any upfront payment.urrency forward settlement can either be on a cash or a delivery basis, provided that the option is mutually acceptable and has been specified beforehand in the contract. Currency forwards are over-the-counter (OTC) instruments, as they do not trade on a centralized exchange.