Say instead of directly buying 2m EUR Jan 31,2024 forward, you buy 2m EUR spot and the swap that with Jan 31, 2024 as forward date. Why would transaction costs will be less than the outright forward trade?
It really is the same trade because the spot flows exactly offset the initial exchange on the fx swap. The interbank market consists of two separate components a) spot prices and b) forward points representing the difference between spot and forward. So, if you ask a dealer for an outright forward price, you are going to get that dealer price for a)+b). It’s possible that this is a slightly worse aggregate price than getting the best dealer price for a) + the best dealer price for b), potentially with different dealers.