Back to Glossary
General TradingF
FX Swap
An FX swap is a transaction involving the simultaneous purchase and sale of a currency pair for two different value dates. It combines a spot transaction with a forward transaction and is commonly used by institutions to manage currency exposure and liquidity.
Example
“The multinational corporation executed an FX swap, buying EUR/USD spot and simultaneously selling it forward three months out, to manage its short-term euro funding needs without taking on exchange rate risk.”