FX Part 2 – FX Derivatives

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FX 102: FX Derivatives

3. Outright Forwards Part 2

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The text explains the usage of forward contracts and FX swaps. It details how an exporter manages exchange risks by entering into a forward contract to convert foreign to local currency on a set date. If payment delays occur, they can use an FX Swap to adjust the contract. Settlement rules, including exceptions like the modified following and end-end rules, are discussed, emphasizing transaction timing considerations in FX markets.