Foreign Exchange: Characteristics, Products, Organisation, and Uses

Foreign exchange lies at the heart of the global financial system. Every second, currencies are being bought and sold somewhere in the world—powering global trade, shaping investment returns, and reacting instantly to news and events. The foreign exchange (FX) market is the world’s largest and most active marketplace.

Understanding how this vast and fast-moving market works is essential for anyone involved in global business or finance. Beyond spot transactions, the FX world offers a wide array of derivative products—each with its own conventions, pricing methods, and strategic uses. In parallel, the organisation of trading, the rules and regulations that govern it, and the operational backbone that supports every deal are crucial elements in ensuring efficiency, transparency, and risk control.

This course provides the background, context, and practical framework to make sense of the FX market as both a dynamic economic force and a professional discipline.

At the end of this training course, participants will have a thorough understanding of foreign exchange markets, products, trading protocols, risk management, and practical hedging applications.

The combination of theoretical knowledge, real-world applications, and hands-on exercises will equip participants with the skills and confidence to navigate FX markets effectively.

FX Market Characteristics

• Brief history

• What is Forex?

• Main currencies

• What affects exchange rates?

• Actors on the FX markets

FX Spot Products

• Currency pairs

• Conventions

• Contract characteristics (rate, value date, ...)

• How is it quoted? (spread, pips, figures, ...)

• Crosses and calculations

• FX position

• FX risks (volatility, settlement, CLS, Hedging)

Derivatives

• Forwards

  • Characteristics and concepts

  • Calculation

• Swaps

• • FX swaps

  • Cross-currency interest rate swaps

• Non Deliverable Forwards

  • Concept and functioning

  • Calculation

  • Market manipulation risk

• Futures

  • Concepts

  • Organisation

  • FX futures

• Options

  • Concepts

  • Vanilla options

  • Exotic options

Trading Organisation and Requirements

• Quoting & Trading tools

• Trading rules and requirements (model code, ACI, disputes, ...)

• Back-office and confirmations

• Regulations

• Dealing with private/commercial clients

• Exercise: building a client dealing platform

Using FX Derivatives: Hedging a Multi-Currency Bond Portfolio

• Hedging the FX risk

• Target Hedge Ratio

• Rebalancing / Rollover

• Realised / Unrealised P&L

Practical Exercise

• Hedging a multinational firm with FX derivatives

This course is dedicated to Senior Management form the International Banking Services and Capital Markets Departments of commercial banks.