Question: What is the difference in purpose between spot trades and FX swaps? Spot trade involve an immediate and simultaneous purchase of one currency and sale
What is the difference in purpose between spot trades
and FX swaps?
Spot trade involve an immediate and simultaneous purchase of one currency and sale of another currency, whereas FXX swaps extend spot trades to mature at a later date.
Both spot trades and sweps convey the anticipation of a currency's appprecation
or dep eciation against another currency, differing solely in the selected date:
FX swaps express a view that one currency will appreciate or depreciate relative
to another curering while spot trades areysed to extend existing transaction To mature at a later date
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