Current swap rate curve
If there is a full exchange of principal when the deal is initiated, the exchange is reversed at the maturity date. Currency swap maturities are negotiable for at least 10 years, making them a very flexible method of foreign exchange. Interest rates can be fixed or floating. Because swap rates incorporate a snapshot of the forward expectations for LIBOR, as well as the market’s perception of other factors such as liquidity, supply and demand dynamics, and the credit quality of the banks, the swap curve is an extremely important interest rate benchmark. Although the swap curve is typically similar in shape to the equivalent sovereign yield curve, swaps can trade higher or lower than sovereign yields with corresponding maturities.