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FX & Currencies

When money trades money
~25 min · 6 lessons

What you'll learn

  • ✓Read an FX pair quote
  • ✓Explain interest rate parity
  • ✓Describe the carry trade

Lessons

  1. 💴
    Your Tokyo Trip
    When money trades money
    Start →
  2. Pairs, Quotes, and Pips
    Finish the previous lesson to unlock
  3. What Moves Currencies
    Finish the previous lesson to unlock
  4. Interest Rate Parity
    Finish the previous lesson to unlock
  5. The Yen Carry Trade
    Finish the previous lesson to unlock
  6. Final Boss: FX in the Wild
    Finish the previous lesson to unlock

Sources

All content is drawn from the sources below. We deliberately avoid unverified material.

  • Triennial Central Bank Survey: Foreign exchange turnover in April 2022
    Bank for International Settlements · institutional
    Source for the ~7.5 trillion USD daily FX turnover figure used in lessons 2 and 6.
    https://www.bis.org/statistics/rpfx22_fx.htm
  • The Economics of Exchange Rates (Sarno and Taylor)
    Cambridge University Press · academic
    Reference for covered and uncovered interest rate parity, and empirical evidence on each.
  • Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER)
    International Monetary Fund · institutional
    Reference for floating, managed, and pegged exchange rate regimes referenced in lesson 6.
    https://www.imf.org/en/Publications/Annual-Report-on-Exchange-Arrangements-and-Exchange-Restrictions
  • Statement on Monetary Policy, July 31, 2024 (BoJ rate hike to 0.25 percent)
    Bank of Japan · institutional
    Confirms the BoJ rate move that helped trigger the August 2024 carry unwind in lesson 5.
    https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2024/k240731a.pdf
  • Coverage of the August 5, 2024 yen unwind and Nikkei 225 plunge
    Financial Times / Bloomberg / Reuters · article
    Reporting on the 12.4 percent single-day Nikkei 225 drop on August 5, 2024 and the carry trade unwind referenced in lesson 5.
  • Bank of England archive: ERM and the events of 16 September 1992
    Bank of England · institutional
    Background for the Black Wednesday tease at the end of lesson 6.
    https://www.bankofengland.co.uk/archive
  • Foreign Exchange (FX) market overview
    Bank for International Settlements · institutional
    General reference for major versus minor pair conventions and FX market structure.
    https://www.bis.org/forum/research.htm