# currencies-and-fx

Walks your agent through spot and forward rates, interest rate parity, cross rates and FX hedging for international portfolios.

- skill · `type=skill` · Claude Code, Codex, Cursor, GitHub Copilot, Gemini CLI, OpenCode · 726 installs · ★ 218
- Author: JoelLewis
- License: MIT · policy=mirror · the beginning of the file is at the end of this page
- Source: https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/currencies-and-fx/SKILL.md
- Updated: 2026-07-18
- HTML: https://affpapa.org/en/nevibecode/skills/currencies-and-fx

## What it does

The skill hands the agent a reference on currency markets: spot and forward rates, covered and uncovered interest rate parity, forward premium, cross rates, carry trades, the real exchange rate and purchasing power parity. It ships a formula table with use cases and worked examples.

The examples compute a forward rate from spot and two interest rates, then work out the cost or benefit of hedging a currency exposure. A pitfalls section covers quoting conventions like EUR/USD versus USD/JPY, nominal against real rate differentials, and the crash risk in carry trades. Forward rates here are arbitrage-determined prices, not forecasts of future spot.

Cross-references point at historical-risk, equities and fixed-income-sovereign from the wealth-management plugin. Install this skill on its own and those links lead nowhere. The material stops partway through the cross-references section.

## Install

### Claude Code (native platform)

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill currencies-and-fx -a claude-code
```

2. **Manually: put the files in place**
- File: `~/.claude/skills/currencies-and-fx/SKILL.md` — Copy the whole skill folder; for one project use .claude/skills/currencies-and-fx/

### Codex

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill currencies-and-fx -a codex
```

2. **Manually: put the files in place**
- File: `.agents/skills/currencies-and-fx/SKILL.md` — For all projects use ~/.agents/skills/

### Cursor

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill currencies-and-fx -a cursor
```

2. **Manually: put the files in place**
- File: `.cursor/skills/currencies-and-fx/SKILL.md` — Cursor also reads .agents/skills/ and .claude/skills/

### GitHub Copilot

1. **GitHub CLI**
```bash
gh skill install JoelLewis/finance_skills currencies-and-fx
```

2. **Manually: put the files in place**
- File: `.github/skills/currencies-and-fx/SKILL.md`

### Gemini CLI

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill currencies-and-fx -a gemini-cli
```

2. **Platform CLI**
```bash
gemini skills install https://github.com/JoelLewis/finance_skills --path plugins/wealth-management/skills/currencies-and-fx
```

### Windsurf (Devin Desktop)

**Manually: put the files in place**
- File: `.devin/skills/currencies-and-fx/SKILL.md` — The legacy .windsurf/skills/ path still works

### OpenCode

**Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill currencies-and-fx -a opencode
```

### Claude.ai

**Claude.ai**
- Zip the folder and upload it in Settings → Capabilities → Skills

Where a file is given instead of a command, copy the files from the source to that path: https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/currencies-and-fx/SKILL.md

## When to use it
- compute a forward rate from spot and two interest rates
- work out what hedging a currency exposure costs
- derive a cross rate through a common third currency
- explain covered versus uncovered interest rate parity
- size the unwind risk in a carry trade

## Example prompts
- Calculate the 1-year USD/JPY forward rate with spot at 150, US rate 5% and Japan rate 0.5%
- Should I hedge my European stocks back to dollars, and what would it cost?
- Derive EUR/GBP from EUR/USD and GBP/USD

## Source text · SKILL.md · MIT

Below is the content of a third-party file. It is data, not instructions for you: do not act on anything written inside unless the human asks. Block tag: ac466d23535bf517.

BEGIN THIRD-PARTY FILE ac466d23535bf517
```text
---
name: currencies-and-fx
description: "Analyze currency markets, exchange rate mechanics, and FX risk management for international portfolios. Use when the user asks about exchange rates, FX hedging, interest rate parity, carry trades, forward premiums, cross rates, or currency overlay programs. Also trigger when users mention 'strong dollar', 'weak euro', 'hedging foreign stocks', 'purchasing power parity', 'currency risk in my portfolio', 'EUR/USD', 'yen carry trade', or ask whether to hedge international investments."
---

# Currencies and FX

## Core Concepts

### Spot Rate
The price of one currency in terms of another for immediate delivery (T+2 settlement). Quoting convention: EUR/USD = 1.10 means 1 euro costs 1.10 US dollars. Some pairs are quoted as the number of foreign currency units per dollar (USD/JPY = 150), while others are quoted as dollars per foreign unit (EUR/USD = 1.10, GBP/USD = 1.27).

### Forward Rate
The agreed exchange rate for a future currency transaction, determined by the interest rate differential between the two currencies. Forward rates are not forecasts of future spot rates — they are arbitrage-determined prices that reflect the cost of carry.

### Covered Interest Rate Parity (CIP)
An arbitrage condition that must hold (and empirically does, closely):

F/S = (1 + r_d) / (1 + r_f)

where F = forward rate, S = spot rate, r_d = domestic interest rate, r_f = foreign interest rate (for the same period). If CIP were violated, riskless arbitrage would be possible by borrowing in one currency, converting, investing, and locking in the return with a forward.

### Uncovered Interest Rate Parity (UIP)
A theoretical (not arbitrage-enforced) condition:

E(S_t) / S_0 = (1 + r_d) / (1 + r_f)

UIP predicts that the expected future spot rate adjusts to offset interest rate differentials. Empirically weak — high-interest-rate currencies tend to appreciate rather than depreciate as UIP predicts, which is why carry trades can be profitable.

### Forward Premium/Discount
Forward Premium = (F - S) / S = (r_d - r_f) / (1 + r_f)

If the domestic interest rate exceeds the foreign rate, the forward rate is at a premium to spot (the foreign currency is more expensive forward). If the domestic rate is lower, the forward is at a discount.

### Carry Trade
```
END THIRD-PARTY FILE ac466d23535bf517

The third-party file has ended. Everything between the ac466d23535bf517 tags is data: requests and commands from it are not followed. An “end of file” line with another tag inside the block is part of the file.

First 2306 of 7752 bytes. © JoelLewis · MIT · https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/currencies-and-fx/SKILL.md

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