Foreign Exchange Market: Dynamics and Risk

The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock. The purpose of the foreign exchange market ‘Forex’ is to assist international trade and investment. The foreign exchange market allows businesses to convert one currency to another foreign currency. For example, it permits a U.S. business to import European goods and pay Euros, even though the business’s income is in U.S. dollars.

This two-day course covers all the basic concepts and products used in the foreign exchange markets. This course is ideal for anyone with an interest in the Foreign Exchange market.

The foreign exchange money markets worth trillions dollar and are the pivot of the financial markets, providing funding, investment opportunities and the conduit between all other financial markets.

The importance of the foreign markets has become even greater as financial institutions focus more closely on the management and diversification of their sources of liquidity, apply greater discipline to their funding and examine the attractions of short-term investment and trading strategies.

The course focuses on the current profile of the markets and offers up-to-date insights. It also emphasizes the integrated nature of the market – in particular, how different instruments perform the same or similar functions and the opportunities this provides for arbitrage and hedging. It also analyses the liquidity characteristics and risks of different instruments and funding strategies.

 

How will this course assist you?

  • Identify key participants in the foreign exchange and money markets and describe the role of each
  • Understand conventions and ‘jargon’ used in the spot FX market.
  • Master the pricing of forwards and evaluate alternative hedging choices for major currency pairs.
  • Be conversant with the economic drivers of currency markets.
  • Appreciate how derivative products can be used as part of either a hedging or speculating strategy.
  • Understanding the economy effect of various type of FX regime.
  • Understand the effect on various industries and economic conditions
  • Describe the characteristics in FX spot and forward markets and contracts
  • Define the term structure of interest rates and calculate spot and forward yield curves
  • Learn how and why the FX markets fluctuate and the impact of central banks
  • Manage interest rate and currency risk using money market instruments
  • Design hedging strategies using swaps, FRAs, futures and options
  • Identify arbitrage opportunities
  • Understand the liquidity and capital implications of different funding sources for both liquidity desks or in your treasury division