Foreign Exchange (FX) School Training Course

Everything You Need to Know About How to Effectively Manage Foreign Exchange Transactions

This foreign exchange training course provides in-depth working knowledge of the foreign exchange (FX) product and market environment.

You gain a thorough understanding of the principal functions and characteristics of the FX market and its related instruments from both a hedging and trading point of view.

This course may also act as a useful preparation for ACI qualifications. This course adds other features such as Risk identification, risk management and suitability of products with worked examples and Excel exercises.

The case studies are derived from experiences drawn from the FX operations of large, multinational money centre banks and corporations.

You gain an understanding of the relevant pricing mechanisms for spot, forwards, longer dated transactions and currency swaps, the non-deliverable market and the principals of foreign exchange options.

FX School Course Highlights

• Size and scope of the FX market and the various market participants
• The role of governments and central banks in the FX markets
• Economic influences on FX markets and fixed vs. floating exchange rates
• Identifying currency exposures for corporate and financial institutions
• Invoicing and FX risk management in a multi currency environment
• Spot market FX pricing with bid and offer
• Cross currency FX pricing with bid and offer
• Establishing FX positions and the impact of market movements on open risk
• Review the principal money markets and the linkages to the FX market
• The forward FX market and a step by step development of the no-arbitrage theory of forward FX pricing
• Calculate both sides of the theoretical swap points from a two-way spot and the bid and offered interest rates
• Calculating cross currency forwards
• Understanding the impact of the spot rate on forward FX pricing
• Short dated FX swaps and pricing conventions
• “Rolling over” a spot FX position with short and longer dated FX swaps
• Calculating profit or loss
• Deriving the cost of borrowing or lending through FX swaps
• Identifying interest arbitrage opportunities between the FX and money markets
• Extending or reducing the term of an outright forward FX using FX swaps
• Gain in depth knowledge of the workings of the non-deliverable FX market (NDF) and its rationale
• Analysis of the documentary support for the structure and the features of NDFs as well as their pricing and valuation
• Introduction to FX options and the elements of pricing using the relevant pricing models.
• Electronic trading and the impact of HFT
• The structure and functionality of electronic dealing systems
• Understanding market risk management for FX
• Counterparty risk and the global clearing architecture for FX transactions

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