Currencies And Fx

This handles currency analysis and FX risk management for international portfolios. You'll reach for it when users ask about exchange rates, hedging mechanics, interest rate parity, carry trades, or managing currency exposure in foreign investments. It covers both the arbitrage-enforced math (covered interest parity, forward pricing) and the empirically messier stuff like uncovered interest parity and why carry trades actually work despite theory. The examples walk through forward rate calculations and hedging cost computation with real numbers. One thing to note: it's honest about the limits, especially that forward rates aren't predictions and carry trades come with serious tail risk. Good for wealth management contexts where currency decisions matter to portfolio returns.

skills.sh installs: 765
GitHub stars: 224
last updated: Aug 21, 2026

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Install

$ npx -y skills add joellewis/finance_skills --skill currencies-and-fx --agent claude-code

Installs into .claude/skills of the current project.

Files

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.