A currency swap in which one side is a fixed rate currency and the other a floating rate payment (such as U.S dollar LIBOR). This type of swap combines the features of a currency swap and an interest rate swap. In circus swaps, a loan denominated in one currency and effected at a fixed rate is typically swapped for a floating rate loan denominated in another currency.

This type of currency swap is usually used in cases where the two currencies in question don’t have active swap markets. So the circus swap acts as a link between the two fixed-rate swaps. Circus swaps come also under two different names: “currency coupon swap” and “cross-currency swap”.

CIRCUS stands for “Combined Interest Rate and Currency Swap”.