Import Currency Hedge Coverage

Compare the landed local-currency cost of settling a supplier invoice immediately at the spot exchange rate versus locking in a forward contract. Enter the foreign currency amount, the quoted spot and forward rates, and any bank markups or transaction fees that differ between the two paths to understand the net hedge impact.

Invoice value expressed in the billing currency (e.g., EUR, CNY).
Use the local-currency price for one unit of the billing currency (e.g., USD per EUR).
Percentage charge applied when settling at the spot rate, including bank spread.
Forward exchange rate quoted for the hedge expiry date (local currency per foreign unit).
Percentage cost applied to the forward, such as contract fees or margin.

Examples

  • €100,000 invoice, spot 1.0825 USD/EUR with 0.45% fee vs. 1.0975 forward with 0.25% fee ⇒ −$1,680.00 (forward premium)
  • £250,000 invoice, spot 1.2200 USD/GBP with 0.30% fee vs. 1.2420 forward with 0.10% fee ⇒ −$5,650.00 (forward costs extra)

FAQ

What does a negative value mean?

A negative result indicates the forward contract will cost more in local currency than settling at the current spot rate, so the hedge carries a premium.

Can I interpret the result as savings?

Yes. When the calculator outputs a positive number, that amount equals the local-currency savings achieved by locking the forward contract instead of waiting to pay spot.

Should I include bank wire fees?

Include any per-transaction or percentage-based costs that differ between the spot and forward settlement paths so the comparison reflects the true cash impact.

How can I evaluate break-even rates?

Test different forward quotes or adjust the spot rate field to the level at which the result equals zero—the difference reveals the break-even forward points for your trade date.

Additional Information

  • Interpretation: a positive number represents savings from hedging forward, while a negative value signals the forward contract is more expensive than paying spot today.
  • Always pair the result with a sensitivity check on currency moves using the True Currency Exchange Rate Calculator to test alternative spot scenarios before expiry.
  • For comprehensive landed cost planning, combine this hedge output with the Currency Conversion Fee and Import Duty Gross-Up tools to include banking spreads and customs charges.

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