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A spot exchange rate is for immediate delivery, while a forward exchange rate is for a future exchange, which can be up to one year out. When a firm buys currency forward, it agrees to exchange a specific amount for a set price on a future date. This can be helpful for firms concerned about currency fluctuations, like an Australian firm receiving euros from a German firm in 90 days. By locking in a forward rate, the firm can protect against potential currency value changes.