A: (1) Swap trading refers to a foreign exchange trader buying or selling foreign exchange of a certain term, and at the same time selling or buying the same amount of foreign exchange of another term. Swap trading will not change the trader's foreign exchange holdings, but will change the duration of the trader's holding of currency. Currency swap means that both parties agree to pay the interest rate and principal of debt in a certain currency. A typical currency swap is to exchange floating-rate US dollar bonds with fixed-rate bonds in other currencies, and exchange the principal on the maturity date.

(2) Swaps are mainly used to hedge forward positions and offset the risks caused by exchange rate fluctuations through swaps. Currency swap is a trader with different financing abilities and capital requirements for different currencies in the capital market, which enables both parties to achieve their respective financing purposes at a lower cost.