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


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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