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FX Trading

Spot Rate

The current exchange rate (or current market value) at which a currency pair can be bought or sold for immediate delivery.

Simple Example: TechCorp, a US-based company, needs to make a payment of €100,000 to a vendor in France. If the spot rate for USD/EUR is 1.1000, TechCorp will exchange USD for EUR at this rate.

Numerical Breakdown

  • If the spot rate is 1.1000, to exchange $110,000 USD, TechCorp would receive:
  • 100,000×1.1000=110,000100,000 \times 1.1000 = 110,000100,000×1.1000=110,000 USD.

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