In a forward transaction, a currency is bought or sold against another currency at a specific maturity date (more than two trading days in the future). The exchange rate, however, is fixed immediately when the forward contract is concluded.
The exchange rate for a forward transaction is different from the one of a spot transaction: the premium or discount primarily depends on the interest margin between the two currencies over the term of the transaction.
Forex forward transactions are an important instrument to hedge against the fluctuations in the currency market: If, for example, a machine producer based in Switzerland gives a quote to produce and export a machine in 9 months from now and the payment of this machine will be in USD, it is important for the machine producer to protect himself against a possible de-valuation of the USD, as any downward change in the currency rates would have a 1:1 negative impact on his margin. To eliminate this currency risk, the producer can already today sell the USD against his home currency CHF (but with maturity date fixed on the day of the delivery). By doing so, he already knows exactly what his effective margin is.
Here you learn how to book a forward trade with amnis.