This module focuses on practical calculations used in foreign exchange markets and introduces key concepts related to currency trading and arbitrage. Learners examine bid and ask rates, percentage spreads, and quotation calculations that financial institutions use in currency transactions. The module also explains how arbitrage opportunities arise and how traders use price differences across markets to generate profits. By studying both theoretical and applied examples, learners will gain the analytical skills required to interpret exchange rate calculations and identify potential arbitrage opportunities in international financial markets.

This module explores forward exchange rates, interest rate relationships, and major international financial theories that explain exchange rate movements. Learners examine how forward rates are calculated and how swap points reflect interest rate differentials between currencies. The module also introduces key economic theories such as Purchasing Power Parity (PPP), Covered Interest Parity (CIP), and Fisher’s International Effect. These theories help explain the long-term relationships between exchange rates, inflation, and interest rates. By the end of the module, learners will understand how financial institutions apply these concepts to manage international investments and currency risk.

This module examines the historical evolution of international monetary systems and the operational structure of modern foreign exchange markets. Learners explore major monetary frameworks including the gold standard, the Bretton Woods system, and the transition to flexible exchange rate regimes. The module also explains the role of central banks in stabilizing currency markets and outlines the structure of the global foreign exchange market. Finally, learners gain insights into foreign exchange dealing room operations and the role financial institutions play in managing currency transactions and risks.