A system used by banks in the UK that transfers money electronically.
A bear is someone who believes market prices will fall.
This is a market whose prices are falling.
This is the price at which your currency broker wishes to buy foreign
currency against the Pound.
The term often referred to here is a market bottom, which is an area where prices when falling, encountered heavy support and were unable to progress any lower. The prices would then either start going up or be consolidated (trade
A Bull is someone who thinks that market prices will go up.
A Bull Market is a market where the prices are going up.
A Broker acts as a middle man between yourself, if you are the client, and
Cable is the term used for the GBP Sterling versus US Dollar exchange rate.
(The word comes from the cable laid under the Atlantic, which linked the
tickertape machines in New York and London.)
This relates to money deposited in a bank for an indefinite time, and the
interest rate allocated to such funds between banks.
A market involving the buying and selling of cash.
Convertible currency is currency that does not need a bank’s permission to
be converted to another currency or gold.
A correction is the term given for when a market is moving in one direction
and then moves quickly in the other direction. This reversal of direction or
correction will often be more rapid than the initial flow, and is often
advantageous for the overall market movement.
This term refers to each of the parties involved in a transaction.
A cross rate is one which does not include the US Dollar, using only other
Day Trading relates to the opening and closing of positions which remain the
same during one trading day.
The dollar rate is the rate given to currencies against one unit of the US
Dollar. The GBP Sterling versus US Dollar exchange rate (or cable) is the only
exception to the rule, as this is quoted as units to the US Dollar to one GBP
The European Central Bank or ECB is in charge of managing the Euro currency
together with European interest rates and monetary policy.
Electronic Fund Transfers. These occur between banks and are the most common
way of sending and receiving money.
European Monetary System.
European Monetary Union.
Exchange Rate Mechanism.
Exchange Rate Depreciation
This term refers to money which does badly against one or more currencies.
Exchange Rate Risk
This is the possible loss that a company might incur from a movement in
Federal Reserve / FED
This is the American central bank. Fixed Exchange Rate This is an official
rate of exchange set by banks and other monetary authorities for different
Floating Exchange Rate
A currency has floating exchange rate when its value is decided by the
market, by supply and demand.
Federal Open Market Committee, which sets US interest rates and is in charge
of US monetary policy.
Forex is an abbreviation of foreign exchange.
This is a contract which allows you to fix or lock into a favourable
exchange rate which can then be used to buy currency on a specific date or
period in the future.
FX stands for foreign exchange.
A fundamental analysis is one which is based on economic and political
factors and events.
A hedging transaction involves the purchase or sale of a currency to protect
it against future fluctuation in the foreign exchange rates.
This is the deposit required from you when arranging a forward transaction.
These are the rates that large banks/brokers quote other large banks/brokers
for trade between them.
A Limit Order is one where you set an optimum exchange rate at which, if the
rate is achieved, your currency can be purchased or sold.
OCO (One Cancels the Other) Order
This is the combination of a limit order and a stop loss order at
predetermined market levels, where if one is executed the other order is
This is the rate quoted by your broker at which he/she is happy to sell a
This is the trading of currencies between the hours of 21: 00 and 08:00.
This is the actual conversion of one currency to another.
A spot contract involves the buying of currency with a settlement date of
two business days forward, which offers the fastest delivery time.