Foreign exchange swap (FX Swap) refers to a foreign exchange transaction method, which involves two foreign exchange transactions at the same time, one is to buy and sell a certain currency immediately, and the other is to buy and sell the same currency again on a predetermined date in the future. Usually, the first transaction is conducted at the spot exchange rate, and the second transaction is conducted at the predetermined forward exchange rate.

Swap transactions are usually used for risk management in the foreign exchange market, especially when cross-border transactions and foreign exchange are involved. By conducting swap transactions, traders can buy or sell money at a fixed price at a future date, thus reducing the risk brought by exchange rate fluctuations.

Simply put, foreign exchange swap is a way to avoid exchange rate risk by trading between spot exchange rate and forward exchange rate. If you need risk management in foreign exchange trading, swap trading may be an optional strategy. However, the specific application of swap transactions needs to be judged and decided according to the actual situation.