Session 1:

Course Introduction - what is Currency Risk?

• What is currency risk?

• Why has it become so important?

• Recent Examples

Session 2:

Currency Management

• The Statement of Investment Policy

• Passive or active management

• Hedging and Hedge Ratios

• Currency Overlay Techniques

• Return enhancement – Alpha

• Currency as an alternative investment class

Session 3:

Foreign Exchange Markets

• Global Market Overview

• Historical Perspective

• Differential inflation

• Fixed VS floating exchange rates

• Capital Flows- carry plays

• Institutional FX growth (BIS data)

Session 4:

Foreign Exchange Fundamentals

• What drives the market?

• Supply and Demand

• Why do exchange rates move?

• Short or Long Term

• Mean Reversion - PPP

• Government policy and intervention.

Session 5:

Mechanics of Foreign Exchange

• Currency classifications

• Bid/Offer prices and spreads

• Liquidity considerations

• Procedures and practices

Session 6:

Currency Risk Management

Using FX to minimize currency loss

• Spot FX – the initial hedge

• Forward FX – the rolling hedge

• Currency Options – optimization

• New money and redemptions

• Examples and applications

Session 7:

Practical Aspects of Currency Risk Management

• Choosing which bank to deal with

• Competitive pricing

• Using Market Data

• Confirmation and Settlement

• Banking Support

Session 8:

New Technology

• FX Portals/E-FX/TWIST

• Continuous Linked Settlement (CLS)

• Straight Through Processing (STP)

• Real Time Gross Settlement (RTGS)

Course Close