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Forex
April 13, 2020
Forward
April 13, 2020

Forex Swap

Published by TradersColo at April 13, 2020
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    A forex swap (FX swap) refers to an agreement that buying or selling of one currency against another based on the current spot rate. Then, two parties will return the original amount swapped at a specific forward rate.

    The forward exchange rate locks the exchange rate that will be used in the future when exchanging funds, so that offset the possible changes in the interest rates of each currency. Therefore, it provides a hedge for both parties to prevent potential fluctuations in the market. Swap rate in Forex is usually fixed-for-fixed.

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