Foreign Exchange Masterclass

This course is an introduction to Foreign Exchange markets.

The learners will explore the need for this market and how spot FX is quoted and traded. They will examine the influences on FX rates, and then illustrate the construction of various instruments including forwards and swaps. They will price these from fundamentals and expand on their knowledge by assessing cross currency basis.

Finally, they will identify the use of some derivatives such as options and NDFs

Suitability

This course is suitable for anyone new to Foreign Exchange Markets.

Learning Outcomes

Discover the need for foreign exchange
Examine the liquidity and size of the FX market
Elaborate on the breakdown of FX by currency and instrument
Define Spot FX
Understand price quoting conventions
Review the hierarchy of base currencies
Understand the two-way market price
Describe how to interact as a user
Examine an example trade conversation
Define the meaning of a cross rate
Calculate the price for a cross rate in 2 scenarios
Determine the influences on FX rates
Examine interest rate and inflation drivers
Formulate some rules of influence
Evaluate the carry trade
Understand the influences of risk appetite on this trade
Explore purchasing power parity
Define an FX forward
Illustrate interest rate parity
Calculate an FX forward using the interest rate parity formula
Define an FX swap
Illustrate FX swap cash flow
Read and understand an FX swap price quote
Compare FX forwards and swaps
Detail the uses of both
Examine the bank’s hedging requirements and risks
Compare FX Forwards and swaps
Detail the uses of both
Examine the bank’s hedging requirements and risks
Illustrate the principles of FX vanilla options
Understand the currency flow at expiry
Examine the methods of quoting notional and premium
Define a non-deliverable forward
Examine the cash flow at settlement
Understand the origin of NDFs and list some popular NDF currencies

Course Content

Unit 1 – Introduction to foreign exchange

Unit 2- Spot FX

Unit 3 – Trading spot FX

Unit 4 – FX cross rates

Unit 5 – FX drivers

Unit 6 – The carry trade and purchasing power parity

Unit 7 – FX forwards

Unit 8 – FX swaps

Unit 9 – Forwards Vs Swaps

Unit 10 – Cross currency basis swaps

Unit 11 – FX options

Unit 12 – Non-deliverable forwards (NDFs)

This Course Includes

Learn: 12 micro-learning on-demand videos
Check: 12 knowledge checks to validate understanding
Apply: 12 hands-on practical exercises and projects
Requirements: Access to a computer with an internet connection
Accessibility: Access on PC, mobile or TV
Certification: Certificate of completion with CPD record

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