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My gut feeling is that the forward rate of the variable notional forward is adjusted as usual as quanto forward is, i.e., correlation * vol(a) * vol(b), but can anybody please confirm it?By variable notional FX forward, I mean:Payoff in currency CCC = AAA-BBB(T) / AAA-BBB(0) * ( BBB-CCC(T) - K* )where AAA-BBB is BBB per AAA and K* is the forward rate, while the plain vanilla forward is:Payoff in currency CCC = 1 * (BBB-CCC(T) - K), K = BBB-CCC(0) * exp((r-q)t), r is the risk-free rate of CCC and q is the risk-free rate of BBB.Thanks,

When you say variable notional FX Forward, does the buyer own any optionality in the notional delivered under the forward on the expiry date?Usually that is built as a OTM foward + vanilla option and the entire structure is marketed as a "zero-cost solution"Otherwise, if it is just a quanto forward (ie. a EUR/USD forward that pays out in GBP) then it is a combination of long/short quanto put and call.Hence the forward rate is just the quanto forward.