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 | A short-dated composite agreement: | ||
#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. | |||
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]] | ||
Revision as of 07:37, 12 December 2014
Foreign exchange swap contract.
A short-dated composite agreement:
- 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.
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).
