FX swap: Difference between revisions

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imported>Doug Williamson
m (Added 1 line space before see also)
imported>Brianlenoach@hotmail.co.uk
(Link with Cross currency interest rate swap page and clarify.)
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Foreign exchange swap contract.
Foreign exchange swap contract.


A short-dated composite agreement to:
A short-dated composite agreement:


1. Exchange currencies at a fixed 'near leg' date (usually spot) and price, AND
#To exchange currencies at a fixed 'near leg' date (usually spot) and price, AND
 
#To re-exchange the same related currencies and amounts at a later fixed 'far leg' date and price.
2. To re-exchange the same related currencies and amounts at a later fixed 'far leg' date and price.


The composite pricing of the FX swap is favourable for the price-taker, compared with the pricing of the two related outright contracts (for example for spot exchange and forward re-exchange of the same currency pair).
The composite pricing of the FX swap is favourable for the price-taker, compared with the pricing of the two related outright contracts (for example for spot exchange and forward re-exchange of the same currency pair).
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== See also ==
== See also ==
* [[Cross-currency interest rate swap]]
* [[Far leg]]
* [[Far leg]]
* [[Foreign exchange swap]]
* [[Foreign exchange swap]]
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* [[Swap rate]]
* [[Swap rate]]


[[Category:Manage_risks]]
[[Category:Cash_management]]
[[Category:Cash_management]]
[[Category:Manage_risks]]

Revision as of 07:37, 12 December 2014

Foreign exchange swap contract.

A short-dated composite agreement:

  1. To exchange currencies at a fixed 'near leg' date (usually spot) and price, AND
  2. To re-exchange the same related currencies and amounts at a later fixed 'far leg' date and price.

The composite pricing of the FX swap is favourable for the price-taker, compared with the pricing of the two related outright contracts (for example for spot exchange and forward re-exchange of the same currency pair).


See also