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Foreign Exchange Markets and Currency Risk Management

The Foreign Exchange markets have never been busier, or more volatile and risky, especially post Brexit. This course looks at the FX markets, and how to manage currency risk, from a professional, practical perspective.

This programme will explore and explain the FX markets from both the sell side (banks) and buy side (corporate and asset managers) perspective. The course will provide a practical introduction to the Foreign Exchange Markets, the products and the risks. It will give delegates a clear understanding of the impact that currency movements can have on a company and an understanding of how to evaluate, monitor and control currency risks, and formulate an appropriate hedging policy.

New market initiatives such as e-FX and CLS will be covered, and all terminology and jargon will be fully explained.

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Learning Objectives

WHO SHOULD ATTEND

Anyone who requires a good, practical understanding of Foreign Exchange, and the associated risks. This would include treasury management and staff, banking personnel, and people who work in the Financial Services sector.

Pre-Requisites

No prior knowledge is assumed.

Course Content

Introduction and Market Background

  • Historical Overview – the salient points
  • BIS data, latest FX sector growth
  • Why is London the FX Capital?
  • Market participants and their motivations:
    • hedgers, traders, arbitrageurs
  • FX Risk
    • Banks, Corporates, Fund Managers
  • Different currency classifications: G10 major, minor, crosses, emerging markets (EM)

Economics of Foreign Exchange

  • What drives the market? Why do exchange rates move?
  • Long and short term influences
  • Supply and Demand
  • Economic indicators, breaking news, uncertainty and rumour
  • Government policy and intervention.
  • Purchasing Power Parity (PPP)

Mechanics of Foreign Exchange

Market operations

  • Timing, Procedures and practices
  • Spot FX quotes
  • Carry plays

Case study

Forward Foreign Exchange

  • Relationships with interest rates
  • Forward points, Premiums and discounts
  • Currency Options overview – when to use options?

Currency Risk Management

  • Transaction, Trading, Competitive, Translation,
  • Exposure Management Process
  • Practical Aspects of a Hedging Policy
  • Strategic vs Dynamic Hedging
  • Getting the best prices from your bankers/FX providers

Market Initiatives

  • Treasury Management Systems (TMS)
  • FX Providers – Banks, Brokers and E-FX
  • Multi-asset class platforms
  • Continuous Linked Settlement (CLS)
  • Future implications with global financial markets
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PRINCE2 Foundation & Practitioner
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Online Courses

You may prefer an online course if you are looking for a flexible and cost-effective solution. Online courses allow you to study at your own pace, at a time that suits you.

We have the following eLearning options available:

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