Forex swap

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Foreign Exchange

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Products Currency Currency future Forex swap Currency swap Foreign exchange option

A Forex swap is an over the counter short term interest rate derivative instrument.

It is the most heavily traded product on the foreign exchange market. If combined with a spot transaction, a Forex swap becomes equivalent to an outright forward foreign exchange transaction.

It should not be confused with a currency swap, which is a much rarer, long term transaction, governed by a slightly different set of rules.

In emerging money markets, Forex swaps are usually the first derivative instrument to be traded, ahead of Forward rate agreements.