What is a settlement date in Forex market?
Can you give me an idea what is settlement in Forex?
Settlement date, as the name implies refers to the date on which the transaction is settled by the transferor of deposits, with reference to foreign exchange transactions. In a Spot exchange transaction, though the word "Spot" implies "immediate", it usually takes two business days for the transaction to get settled. Though the spot rate is the rate of the day on which the transaction has taken place, the execution of the transaction occurs within a maximum of two working days. But in certain cases of countries currencies, the settlement may take place the very next business day, an example being currency settlement between US Dollars and Canadian Dollars.
There are two aspects involved in settlement dates: the settlement location and dealing location. Settlement location refers to the country in which the transaction has to be settled or paid and dealing location refers to the country in which the bank dealing with the foreign exchange transaction is located. If the Settlement date falls on a holiday, the next business day would be the settlement date.
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Can you give me an idea what is settlement in Forex?