A spot rate of a currency (in terms of another) that is quoted and observed at the present moment in the forex market/ foreign exchange market. The current spot rate is derived from the current spot yield curve for a currency pair.

The forward rate is calculated by adjusting the current spot rate with forward points– the number of points to be added or subtracted in order to arrive at the forward rate for a certain future period. The adjustment represents a ‘forward margin’- i.e., the interest rate differential of the two currencies being quoted.

The current spot rate can also be used as forecast for a certain short period of time, reflecting the market estimate of the spot rate in that period.