The standard delivery time for a forex spot rate is T+2 days. Should a counterparty wish to delay delivery, they will have to take out a forward contract. Most of the time it is the forex dealers that have to manage this. For example, if a EUR/USD trade is executed at 1.1550, this will be the rate at which the currencies are exchanged on the spot date. However, if European interest rates are lower than they are in the U.S., this rate will be adjusted higher to account for this difference. So if either a dealer or their counterparty wishes to own EUR and short USD for a period of time it will cost them more than the spot rate. It should be noted that spot rate delivery times are not standard and may vary for some pairs.
Although the forex spot rate calls for delivery within two days, this rarely occurs in the trading community. Retail traders that hold a position for longer than two days will have their trades “reset” by the broker, i.e., closed and reopened at the same price, just prior to the two-day deadline. However, when these currencies are rolled there will be a premium or discount attached in the form of an increased rollover fee. The size of this fee depends on the difference in interest rates, via the short-term FX swap.
Because the spot rate is the rate of delivery with no adjustment for interest rate differential, it is the rate quoted in the retail market.
The retail forex market is dominated by travelers who wish to buy and sell foreign currency, whether it be through their bank or a currency exchange.