Foreign Exchange Forward
FX Forward is an agreement to purchase or sell a fixed amount of foreign currency, where the exchange rate is fixed on the day of the contract (deal date), but the actual exchange takes place on a pre-determined date in the future (value date).
Foreign Exchange Swap
FX Swap is a simultaneous exchange of identical amounts of one currency for another with two different value dates. It is a combination of FX Spot and FX Forward.
- Used in hedging or mitigating foreign exchange risk
- Aid in managing of cash flows