Currency Futures vs. Forwards for Foreign Exchange Risk Management

XYZ Corporation is a manufacturer of electronic goods that imports raw materials from various countries, exposing itself to significant foreign exchange risk due to fluctuations in currency rates. To mitigate this risk, the company is considering using currency futures and forward contracts.

Discuss the key differences between currency futures and forward contracts. In your response, include specific details on contract specifications, liquidity, counterparty risk, and pricing. Additionally, explain how XYZ Corporation might utilize these instruments to hedge its foreign exchange risk.