Hi,We have recently built money market curves for non-USD currencies (say XXX) using USD money market curve as the base curve and determined the non-USD money market curve using FX forward points between USD and XXX. Below are my questions.1. We seem to getting the FX forward points as a kind of spread. I do not understand how to read this spread and what it actually means in reality2. How the above FX spread is applied on to the base curve interest rates to derive the XXX currency money market rates.We have successfully calibrated the curves by following a help guide but I am interested in knowing what it means.thanks,Kiran

Maybe it means fx forwards are not very liquid? Because it is easier to use storage to make like a synthetic forward? I would guess the forward points are built off the curves by dealers.I am curious. Suppose US employment report comes in good, and US bonds drop more than German bonds. How much does the USD spot go up versus the forward go down, or what?

Shouldn't it be the other way round, that other currencies' money markets are less liquid than their FX markets and hence money market curves are being built using FX spreads & USD curve?

Hold on, you state that you have already built the XXX curve using the fwds? If so, how can you not answer your basic question?Generally, FX fwd points are quoted as a spread to spot. Given your inputs, you should look into "interest rate parity" to get a basic idea of the principles. Once you understand the basics, you can find some technical papers that delve into the gory details (look for posts by cpulman, for example).