Can someone help me understand hedging mechanism from using FX forwards vs Swap? So say for instance, I pulled a HKD RMB forward curve from Bloomberg. What is the rationale for having the respective curves - what conclusions am I supposed to draw from say a 3 year forward curve vs a 3 year swap rate? I have seen PE firms use the 3 year swap rate to hedge proceeds for instance.
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Swaps are a series of exchanges (fixed to float, etc.) that transact intermittently. Forwards are just contracts to lock in a rate for a one-time transaction in future.
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