FX swap: Difference between revisions
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imported>Brianlenoach@hotmail.co.uk (Link with Cross currency interest rate swap page and clarify.) |
imported>Doug Williamson (Spacing.) |
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#To 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. | #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). | ||
Revision as of 08:22, 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).
