Interest rate of the second currency (e.g. USD in EUR/USD).
Interest rate of the first currency (e.g. EUR in EUR/USD).
Time Horizon:–
Interest Rate Differential:–
Forward Points (Pips):–
Projected Exchange Rate on Date–
// Set default date to 30 days from now
var today = new Date();
var futureDate = new Date();
futureDate.setDate(today.getDate() + 30);
document.getElementById('targetDate').valueAsDate = futureDate;
function calculateForwardRate() {
// 1. Get Input Values
var spotRate = parseFloat(document.getElementById('spotRate').value);
var quoteRate = parseFloat(document.getElementById('quoteCurrencyRate').value);
var baseRate = parseFloat(document.getElementById('baseCurrencyRate').value);
var targetDateVal = document.getElementById('targetDate').value;
// 2. Validation
if (isNaN(spotRate) || isNaN(quoteRate) || isNaN(baseRate) || !targetDateVal) {
alert("Please fill in all fields with valid numbers.");
return;
}
var currentDate = new Date();
currentDate.setHours(0,0,0,0); // Normalize time
var targetDate = new Date(targetDateVal);
targetDate.setHours(0,0,0,0);
// Calculate time difference in days
var timeDiff = targetDate.getTime() – currentDate.getTime();
var daysDiff = Math.ceil(timeDiff / (1000 * 3600 * 24));
if (daysDiff 0) pipsFormatted = "+" + pipsFormatted;
document.getElementById('pointsResult').innerText = pipsFormatted;
// Format final rate (5 decimal places for precision)
document.getElementById('finalRateResult').innerText = forwardRate.toFixed(5);
// Show results div
document.getElementById('results').className = "results-area visible";
}
Understanding Forward Exchange Rates and Dates
Calculating the exchange rate for a specific future date is a critical task for international businesses, investors, and traders. Unlike the "Spot Rate," which applies to immediate settlements (usually T+2 days), the rate for a future date is known as the Forward Rate.
This calculator determines the theoretical forward exchange rate based on Interest Rate Parity (IRP). This economic theory states that the difference in interest rates between two countries is equal to the differential between the forward exchange rate and the spot exchange rate.
Why does the rate change over time?
Currencies with higher interest rates tend to trade at a "discount" in the forward market compared to currencies with lower interest rates. This is to prevent risk-free arbitrage opportunities.
How to Use This Calculator
Current Spot Rate: Enter the current market price of the currency pair (e.g., 1.1000 for EUR/USD).
Target Valuation Date: Select the date in the future for which you need the exchange rate projection.
Quote Currency Interest Rate: Enter the annualized interest rate for the second currency in the pair (the "Quote" currency). For EUR/USD, this is the USD rate.
Base Currency Interest Rate: Enter the annualized interest rate for the first currency in the pair (the "Base" currency). For EUR/USD, this is the EUR rate.
Calculation Logic
The calculator uses the standard formula for Covered Interest Rate Parity:
t: Time period in years (calculated as Days / 360).
Example Scenario
Imagine the Spot Rate for GBP/USD is 1.2500. The UK interest rate (Base) is 5.0%, and the US interest rate (Quote) is 3.0%. You want to know the rate 90 days from now.
Because the base currency (GBP) has a higher interest rate than the quote currency (USD), the forward rate will be lower than the spot rate. The calculator will determine exactly how much lower the rate should be to offset the 2% interest rate advantage of holding GBP.