FX swap trades
Hypothetical trades:
"If we expect more rate hikes in Russia than in the US over the next year we can B/S RUB in 12m USDRUB FX swap" The reason? I think it may be due to how the swap points would increase but since we bought RUB we would be "paying" less...? Thus, we would have positive PNL?
"Other way round, if we expect European crisis to worsen, we expect the EURUSD basis to widen so we S/B EUR in EUR/USD FX swaps" Again, swap points would increase (basis is negative and EUR is denominator) and since bought $ we once again have to pay less...?
These two trades are from "Interest Rate Markets, Trading Practices" by Anton Izvolenskiy