Currency forwards differ from futures primarily in that:

Currency forwards allow for customization, which is a key distinction from futures. In a forward contract, the terms—including the amount of currency, the exchange rate, and the settlement date—can be tailored to meet the specific needs of the parties involved. This flexibility is beneficial for businesses that want to hedge against specific foreign exchange risks that may not align with standardized contract terms.

In contrast, futures contracts are standardized agreements traded on an exchange, which means they have set terms like contract size and expiration dates. This standardization allows for liquidity and ease of trading but lacks the flexibility that forwards provide. Importantly, this customization in forwards makes them particularly useful for parties with unique hedging requirements or those seeking to execute specific strategies.