- Absolute Rate
- The fixed portion of an interest-rate swap, expressed as a percentage rather than as a premium or a discount to a reference rate.
A momentum indicator that attempts to gauge supply and demand by
determining whether investors are generally "accumulating" (buying) or
"distributing" (selling) a certain stock by identifying divergences
between stock price and volume flow. It is calculated using the
((Close – Low) – (High – Close)) / (High – Low) * Period's volume
- In currencies, this is the abbreviation for the Andorran Franc.
- Advance/Decline Index
A technical analysis tool that represents the total difference between
the number of advancing and declining security prices. This index is
considered one of the best indicators of market movements as a whole.
Stock indexes such as the Dow Jones Industrial Average only tell us
the strength of 30 stocks, whereas the advance/decline index can
provide much more insight into the movements of the market.
Advance/Decline Index =
(Advances – Declines) + Prior Advance/Decline Index Value
- In currencies, this is the abbreviation for the U.A.E. Dirham.
- In currencies, this is the abbreviation for the Afghanistan Afghani.
- In currencies, this is the abbreviation for the Albanian Lek.
- American Currency Quotation
A direct quotation in the foreign exchange markets whereby the value
of the American dollar is stated as a per-unit measure of a foreign
currency. This type of quotation shows how much U.S. currency it
takes to purchase one unit of foreign currency.
- American Depositary Share (ADS)
A U.S. dollar-denominated equity share of a foreign-based company
available for purchase on an American stock exchange. American
Depositary Shares (ADSs) are issued by depository banks in the U.S.
under agreement with the issuing foreign company; the entire issuance
is called an American Depositary Receipt (ADR) and the individual
shares are referred to as ADSs.
In currencies, this is the abbreviation for the Netherlands Antilles
- In currencies, this is the abbreviation for the Angolan New Kwanza.
The simultaneous purchase and sale of an asset in order to profit from
a difference in the price. This usually takes place on different
exchanges or marketplaces. Also known as a "riskless profit".
- In currencies, this is the abbreviation for the Argentinean peso.
- In currencies, this is the abbreviation for the Argentinean Nuevo Peso.
- Asset Swap
Similar in structure to a plain vanilla swap, the key difference is the
underlying of the swap contract. Rather than regular fixed and floating
loan interest rates being swapped, fixed and floating investments are
- At The Market
An order to buy or sell a futures contract at the best available price
upon entrance into the exchange for execution.
- In currencies, this is the abbreviation for the Austrian Schillings.
- In currencies, this is the abbreviation for the Australian dollar.
- Slang term that is used to refer to the Australian dollar.
- Authorized Forex Dealer
Any type of financial institution that has received authorization from a
relevant regulatory body to act as a dealer involved with the trading of
foreign currencies. Dealing with authorized forex dealers ensure that
your transactions are being executed in a legal and just way.
- In currencies, this is the abbreviation for the Aruba Guilder.
- Balance Of Payments (BOP)
A record of all transactions made between one particular country and
all other countries during a specified period of time. BOP compares the
dollar difference of the amount of exports and imports, including all
financial exports and imports. A negative balance of payments means
that more money is flowing out of the country than coming in, and vice
- Bank For International Settlements (BIS)
An international organization fostering the cooperation of central banks
and international monetary policy makers. Administers the transaction of monies according to the Treaty of Versailles
- Bank Of Canada (BOC)
- The central bank of Canada, influences the country's economy and money supply.
- Bank Of Japan (BoJ)
The Bank of Japan is the Japanese central bank. The bank is responsible
for issuing and handling currency and treasury securities, implementing
monetary policy, maintaining the stability of the Japanese financial
system, providing settling and clearing services.
- Base Currency
The first currency quoted in a currency pair on forex. It is also typically
considered the domestic currency or accounting currency. It is sometimes referred to as the "primary currency".
- In currencies, this is the abbreviation for the Barbados Dollar.
- In currencies, this is the abbreviation for the Bangladesh Taka.
- In currencies, this is the abbreviation for the Bulgarian Lev.
- In currencies, this is the abbreviation for the Bahraini Dinar.
- In currencies, this is the abbreviation for the Burundi Franc.
- Big Figure
The stem, or whole dollar price, of a quote, often used in reference to
foreign currencies or money markets.
- Big Mac PPP
A survey done by The Economist that determines what a
country's exchange rate would have to be for a Big Mac in that country
to cost the same as it does in the United States. Purchase power parity
(PPP) is the theory that currencies adjust according to changes in their
purchasing power. With the Big Mac PPP, purchasing power is
reflected by the price of a McDonald's Big Mac in a particular country.
The measure gives an impression of how overvalued or undervalued a
- Blocked Currency
Any currency that is mainly used for domestic transactions and does
not freely trade on a forex market (usually due to government
restrictions). Also referred to as a "nonconvertible currency".
A record of trades and the details of the trades made over a period of
time (usually one trading day). The details of a trade will include such
things as the time, price, order size and a specification of whether it
was a buy or sell order. The blotter is usually created through a trading
software program that records the trades made through a data feed.
- In currencies, this is the abbreviation for the Bermudian Dollar.
- In currencies, this is the abbreviation for the Brunei Dollar.
- In currencies, this is the abbreviation for the Bolivian Boliviano.
- Bretton Woods Agreement
A 1944 agreement made in Bretton Woods, New Hampshire,
which helped to establish a fixed exchange rate in terms of gold for
- In currencies, this is the abbreviation for the Brazilian Real.
- In currencies, this is the abbreviation for the Bahamanian Dollar.
- In currencies, this is the abbreviation for the Bhutan Ngultrum.
- Bull Put Spread
A type of options strategy that is used when the investor expects a
moderate rise in the price of the underlying asset. This strategy is
constructed by purchasing one put option while simultaneously selling
another put option with a higher strike price. The goal of this strategy is
realized when the price of the underlying stays above the higher strike
price, which causes the short option to expire worthless, resulting in the
trader keeping the premium.
Refers to the central bank of Germany. This is the U.S. equivalent of
the Federal Reserve.
- In currencies, this is the abbreviation for the Botswana Pula.
- In currencies, this is the abbreviation for the Belize Dollar.
In the context of the forex market, the exchange rate between the U.S.
dollar and the British pound sterling. Because it is the norm in forex for
most major currencies to be quoted against the U.S. dollar on a regular
basis, "cable" is a commonly used term. "Cable" can also be used to
refer simply to the British pound sterling.
- In currencies, this is the abbreviation for the Canadian Dollar.
An expert trader who rapidly buys and sells currency throughout the
- Cash Delivery
The same-day settlement of a currency trade in the forex market. This
means that delivery and settlement of the transaction occur on the
same date that the currency trade is made. In order for this to occur,
the forex position must be opened and closed within the same trading
day. Also referred to as "same-day settlement".
- Centralized Market
A financial market structure that consists of having all orders routed to
one central exchange with no other competing market. The quoted
prices of the various securities listed on the exchange represent the
only price that is available to investors seeking to buy or sell the
- In currencies, this is the abbreviation for the Swiss franc.
- China Investment Corporation (CIC)
A government-sponsored entity of the People's Republic of China that
seeks to invest in securities and commodities abroad.
- Choice Market
A market in which the spread between the bid and the ask for a given
financial instrument is zero - meaning that, at any point in time, the
instrument can be bought for the same price as it can be sold in
the market. This type of market only occurs when there is extreme
liquidity and a limited number of intermediaries.
The procedure by which an organization acts as an intermediary and
assumes the role of a buyer and seller for transactions in order to
reconcile orders between transacting parties.
- Clearing Price
The specified monetary value assigned to a security or asset. This
price is determined by the bid and ask process of buyers and sellers
interested in trading the security.
- In currencies, this is the abbreviation for the Chili Peso.
- In currencies, this is the abbreviation for the China Yuan Renminbi.
- Commodity Block Currency
A currency that belongs to a country whose economy is strongly
correlated with the price fluctuations of a certain commodity.
- Compound Option
An option for which the underlying is another option. Therefore,
there are two strike prices and two exercise dates. These are the four
types of compound options:
- Call on a call
- Put on a put
- Call on a put
- Put on a call
- Constant Currencies
An exchange rate that eliminates the effects of exchange rate
fluctuations and that is used when calculating financial performance
numbers. Companies with major foreign operations often use constant
currencies when calculating their yearly performance measures.
- In currencies, this is the abbreviation for the Columbian Peso.
- Country Basket
A derivative security designed to mimic the major index of an
- Cover On A Bounce
The covering of a short position after it has reached and bounced off a
level of support. This strategy waits for the price to move to a support
level, instead of selling before, to see if the level will hold (because
the trader will benefit if it doesn't hold). Once the security bounces it is
clear the security will have trouble moving down further so the trade
covers their short position
- Crawling Peg
A system of exchange rate adjustment in which a currency with a fixed
exchange rate is allowed to fluctuate within a band of rates. The par
value of the stated currency is also adjusted frequently due to market
factors such as inflation. This gradual shift of the currency's par value is
done as an alternative to a sudden and significant devaluation of the currency.
- In currencies, this is the abbreviation for the Costa Rican Colon.
- Credit Netting
A system whereby the number of credit checks on financial
transactions is reduced by entering into agreements that simply net all
transactions. These agreements are made between large banks and
other financial institutions and place all current and future transactions
into one agreement, removing the need for credit checks on each
- Cross Currency
A pair of currencies traded in forex that does not include the U.S.
dollar. One foreign currency is traded for another without having
to first exchange the currencies into American dollars.
- Cross Rate
The currency exchange rate between two currencies, both of which are
not the official currencies of the country in which the exchange rate
quote is given in. This phrase is also sometimes used to refer to
currency quotes which do not involve the U.S. dollar, regardless of
which country the quote is provided in.
- In currencies, this is the abbreviation for the Cuban Peso.
A generally accepted form of money, including coins and paper
notes, which is issued by a government and circulated within an
economy. Used as a medium of exchange for goods and services,
currency is the basis for trade.
- Currency Basket
A selected group of currencies whose weighted average is used as a
measure of the value or the amount of an obligation. A currency
basket functions as a benchmark for regional currency movements - its
composition and weighting depends on its purpose
- Currency Binary
A currency trade that offers an all-or-nothing payoff based on a given
currency exchange rate when the position reaches its expiration date.
Binaries have a single payoff amount rather than the variable profit
amounts found in traditional options.
Binary trades can be used for either hedging purposes (such as
downside protection for assets held in a specific currency) or as a
speculative bet on the direction a specific exchange rate will move. The
going premium on a currency binary represents the consensus "odds"
that the strike exchange rate will be reached by expiration. An investor
or trader can also sell (short) a currency binary position, reversing the
payoff options and effectively betting that the exchange rate will fall.
- Currency Carry Trade
A strategy in which an investor sells a certain currency with a
relatively low interest rate and uses the funds to purchase a
different currency yielding a higher interest rate. A trader using this
strategy attempts to capture the difference between the rates - which
can often be substantial, depending on the amount of leverage
the investor chooses to use.
- Currency Certificate
A note that grants the holder the right to convert a specific amount of
one currency to another at a given exchange rate until it expires. A
currency certificate is a bearer certificate in that there is no registered
owner. Currency certificates are a useful tool for hedging foreign
- Currency Convertibility
The ease with which a country's currency can be converted into gold or
another currency. Convertibility is extremely important for international
commerce. When a currency in inconvertible, it poses a risk and barrier
to trade with foreigners who have no need for the domestic currency.
- Currency Forward
A forward contract in the forex market that locks in the price at which
an entity can buy or sell a currency on a future date. Also known as
"outright forward currency transaction", "forward outright" or "FX forward".
- Currency Futures
A transferable futures contract that specifies the price at which a
specified currency can be bought or sold at a future date.
- Currency Internationalization
The widespread use of a currency outside the original country in
which it was created for the purposes of conducting transactions
between sovereign states. The level of currency internationalization for
a currency is determined by the demand other countries have for that
currency. This depends on the amount of business that is
performed between the countries and/or the perceived value of the
currency as a good store of value.
- Currency Option
A contract that grants the holder the right, but not the obligation, to buy
or sell currency at a specified exchange rate during a specified period
of time. For this right, a premium is paid to the broker, which will vary
depending on the number of contracts purchased. Currency options are
one of the best ways for corporations or individuals to hedge against
adverse movements in exchange rates.
- Currency Overlay
The outsourcing of currency risk management to a specialist firm,
known as the overlay manager. This is used in international investment
portfolios to separate the management of currency risk from the asset
allocation and security selection decisions of the investor's money
- Currency Pair
The quotation and pricing structure of the currencies traded in the forex
market: the value of a currency is determined by its comparison to
another currency. The first currency of a currency pair is called the
"base currency", and the second currency is called the "quote
currency". The currency pair shows how much of the quote currency is
needed to purchase one unit of the base currency.
- Currency Risk
A form of risk that arises from the change in price of one currency
against another. Whenever investors or companies have assets or
business operations across national borders, they face currency risk if
their positions are not hedged.
- Currency Swap
A swap that involves the exchange of principal and interest in one
currency for the same in another currency. It is considered to be a
foreign exchange transaction and is not required by law to be shown on
the balance sheet.
- In currencies, this is the abbreviation for the Cape Verde Escudo.
- In currencies, this is the abbreviation for the Cyprus Pound.
- In currencies, this is the abbreviation for the Czech Koruna.
- Daily Chart
A line graph that displays the intraday movements of a given security.
This contrasts to longer term charts, such as those that show a
security's movement over a period of days, months or even years.
- Daily Cut-Off
In the forex market, a particular point in time specified by a forex dealer
to stand as the end of the current trading day and the beginning of a
new trading day. This is done for primarily administrative and logistical
reasons, because although the forex market trades 24 hours a day, the
market and its intermediaries require a specified beginning and end to
each trading day in order to record trade dates and define settlement
- Daily Trading Limit
The maximum gain or loss on a derivative contract, such as options
and futures contracts, that is allowed in any one trading session. The
limits are imposed by the exchanges in order to protect against
extreme volatility or manipulation within the markets.
- Dayrate Volatility
The intraday volatility of an exchange rate (or price of a good or
service), that changes due to imbalances in supply and demand. Price
levels of various goods or services can change very quickly depending
on the current market condition.
- Decentralized Market
A market structure that consists of a network of various technical
devices that enable investors to create a marketplace without a
centralized location. In a decentralized
market, technology provides investors with access to various bids/ask
prices and makes it possible for them to deal directly with other
investors/dealers rather than with a given exchange.
A general decline in prices, often caused by a reduction in the supply of
money or credit. Deflation can be caused also by a decrease in
government, personal or investment spending. The opposite of
inflation, deflation has the side effect of increased unemployment since
there is a lower level of demand in the economy, which can lead to an
A decrease in the value of a particular currency relative to other
A deliberate downward adjustment to a country's official exchange rate
relative to other currencies. In a fixed exchange rate regime, only a
decision by a country's government (i.e. central bank) can alter the
official value of the currency. Contrast to "revaluation".
- Diamond Top Formation
A technical analysis reversal pattern that is used to signal the end of an
uptrend. This relatively uncommon pattern is found by identifying a
period in which the price trend of an asset starts to widen and then
starts to narrow. This pattern is called a diamond because of the
shape it creates on a chart.
- Direct Quote
A foreign exchange rate quoted as the domestic currency per unit of
the foreign currency. In other words, it involves quoting in fixed units of
foreign currency against variable amounts of the domestic currency.
- Dirty Float
A system of floating exchange rates in which the government or the
country's central bank occasionally intervenes to change the direction
of the value of the country's currency. In most instances, the
intervention aspect of a dirty float system is meant to act as a buffer
against an external economic shock before its effects become truly
disruptive to the domestic economy. Also known as a "managed float".
- In currencies, this is the abbreviation for the Djibourti Franc.
- In currencies, this is the abbreviation for the Danish Krone.
- Dollar Drain
A situation that occurs when a country imports more goods and
services from another country than it exports back to the same country.
The net effect of spending more money importing than is received from
exporting causes a net reduction in the importing country's reserves of
the exporting country's currency.
- In currencies, this is the abbreviation for the Dominican Republic Peso.
- Double No-Touch Option
A type of exotic option that gives an investor an agreed upon payout if
the price of the underlying asset does not reach or surpass one of two
predetermined barrier levels. An investor using this type of option pays
a premium to his/her broker and in turn receives the right to choose the
position of the barriers, the time to expiration, and the payout to be
received if the price fails to breach either barrier. With this type of
option, the maximum possible loss is just the cost of setting up the
A double no-touch option is the opposite of a double one-touch option.
- Double One-Touch Option
A type of exotic option that gives an investor an agreed upon payout if
the price of the underlying asset reaches or surpasses one of two
predetermined barrier levels. An investor using this type of option is
able to determine the position of both barriers, the time to expiration,
and the payout to be received if the price does rise above one of the
barriers. Either one of the barrier levels must be breached prior to
expiration for the option to become profitable and for the buyer to
receive the payout. If neither barrier level is breached prior to
expiration, the option expires worthless and the trader loses all the
premium paid to the broker for setting up the trade.
- Dual Currency Deposit
A fixed deposit with variable terms for the currency of payment.
Deposits are made in one currency, but withdrawals at maturity occur
either in the currency of the initial deposit or in another agreed upon
- Dual Exchange Rate
A situation in which there is a fixed official exchange rate and an illegal
market-determined parallel exchange rate. The different exchange
rates are used in different situations, either in exchanges or
evaluations, as mandated by the government.
- Dutch Disease
An economic condition that, in its broadest sense, refers to negative
consequences arising from large increases to a country's income.
Dutch disease is primarily associated with a natural resource discovery,
but it can result from any large increase in foreign currency, including
foreign direct investment, foreign aid or a substantial increase in natural
This condition arises when foreign currency inflows cause an increase
in the affected country's currency. This has two main effects for the
country with Dutch disease:
1. A decrease in the price competitiveness, and thus the exports,
of its manufactured goods
2. An increase in imports
- Earning The Points
A currency trading term that describes when the forward ask price is
lower than the spot bid price, resulting in a gain for the trader. A trader
is gaining the points when he or she sells at one price now then agrees
to buy for less in the future. Gaining the point only refers to the
difference between sell and buy prices and does not take the time
value of money into account.
This is the opposite of "losing the points".
- Economic Exposure
An exposure to fluctuating exchange rates, which affects a company's
earnings, cash flow and foreign investments. The extent to which a
company is affected by economic exposure depends on the specific
characteristics of the company and its industry.
- In currencies, this is the abbreviation for the Estonian Kroon.
- In currencies, this is the abbreviation for the Egyptian Pound.
- Either-Way Market
A condition that exists in the eurodollar interbank deposit market when
the bid and offer rates for a particular period are equal. Increasing
levels of liquidity can narrow the spread between bid and offer rates
until the two values are identical, resulting in an either-way market.
- Equity Linked Foreign Exchange Option (ELF-X)
A put or call option that protects an investor from foreign-exchange risk
for a future sale or purchase of a specified foreign-equity portfolio.
- In currencies, this is the abbreviation for the Ethiopian Birr.
In currencies, this is the abbreviation for the euro, and when written
numerically, it looks like this: ¬100.
The official currency of the European Union's (EU) member states. The
euro was introduced by the EU in to the financial community in 1999
and physical euro coins and paper notes were introduced in 2002.
Euros are printed and managed by the European System of Central
Banks (ESCB). The euro is abbreviated by the symbol "EUR".
- Euro LIBOR
London Interbank Offer Rate denominated in euros. This is the interest
rate that banks offer each other for large short-term loans in euros.
The rate is fixed once a day by a small group of large London banks
but fluctuates throughout the day. This market makes it easier for
banks to maintain liquidity requirements because they are able to
quickly borrow from other banks that have surpluses.
One of two principal clearing houses for securities traded in the
Euromarket. Euroclear specializes in verifying information supplied by
two brokers in a securities transaction and the settlement of securities.
Euroclear is market owned and governed, and has previously acquired
London Crest, Necigef Netherlands, Sicovam Paris and CIK Brussels.
- Eurocommercial Paper
An unsecured, short-term loan issued by a bank or corporation in the
international money market, denominated in a currency that differs from
the corporation's domestic currency.
- Eurocurrency Market
The money market in which Eurocurrency, currency held in banks
outside of the country where it is legal tender, is borrowed and lent by
banks in Europe. The Eurocurrency market allows for more convenient
borrowing, which improves the international flow of capital for trade
between countries and companies.
The market that includes all of the European Union member countries -
many of which use the same currency, the euro. All tariffs between
Euromarket member countries have been abolished, and import duties
from all non-meber countries have been fixed for all of the member
countries. The Euromarket also has one central bank for all of the
member countries, the European Central Bank (ECB). Also known as
"the common market".
- European Central Bank (ECB)
The central bank responsible for the monetary system of the European
Union (EU) and the euro currency. The bank was formed in Germany
in June 1998 and works with the other national banks of each of the EU
members to formulate monetary policy that helps maintain price
stability in the European Union.
- European Currency Quotation
An indirect quotation in the foreign exchange markets whereby the
value of a foreign currency is stated as a per-unit measure of the U.S.
dollar. This type of quotation shows how much foreign currency it takes
to purchase one U.S. dollar.
- European Monetary System (EMS)
A 1979 arrangement between several European countries to link their
currencies in an attempt to stabilize the exchange rate. This system
was succeeded by the European Monetary Union (EMU), an institution
of the European Union (EU), which established a common currency
called the euro.
- European Terms
A foreign exchange quoting convention where the domestic currency is
quoted in terms of a foreign currency. In other words, it is the amount of
foreign currency that one unit of the domestic currency can buy.
- European Union (EU)
A group of European countries that participates in the world economy
as one economic unit and operates under one official currency, the
euro. The EU's goal is to create a barrier-free trade zone and to
enhance economic wealth by creating more efficiency within its
Japanese yen-denominated deposits held in banks outside Japan. Also
a term that refers to yen traded in the Eurocurrency market.
A geographic and economic region that consists of all the European
Union countries that have fully incorporated the euro as their national
currency. Also referred to as "euroland".
- Exchange Control
Types of controls that governments put in place to ban or restrict the
amount of foreign currency or local currency that is allowed to be
traded or purchased. Common exchange controls include banning the
use of foreign currency and restricting the amount of domestic currency
that can be exchanged within the country.
- Exchange Rate
The price of one country's currency expressed in another country's
currency. In other words, the rate at which one currency can be
exchanged for another. For example, the higher the exchange rate for
one euro in terms of one yen, the lower the relative value of the yen.
- Exchange Stabilization Fund (ESF)
Money available to the U.S. Treasury Department primarily used for
participating in the foreign-exchange market in an attempt to maintain
currency stability. It holds U.S. dollars, foreign currencies and special
- Exotic Currency
A foreign exchange term for a thinly traded currency. Exotic currencies
are illiquid, lack market depth and trade at low volumes. Trading an
exotic currency can be expensive, as the bid-ask spread is usually
- Failure To Deliver
An outcome in a transaction where one of the counterparties in the
transaction fails to meet their respective obligations. When failure to
deliver occurs, either the party with the long position does not have
enough money to pay for the transaction, or the party in the short
position does not own the underlying assets that are to be
delivered. Failure to deliver can occur in both equity and derivatives
Nickname given to the finance ministers from various countries who
meet at global trade summits. Finance ministers are appointed and,
depending on the country, the position can be given to an elected
representative or to a non-elected official. The role played by a finance
minister and the power he or she holds will vary among countries, but
"finmins" are generally responsible for shaping or advising on the
budget of a country and helping with other economic policies.
- Fixed Exchange Rate
A country's exchange rate regime under which the
government or central bank ties the official exchange rate to another
country's currency (or the price of gold). The purpose of a fixed
exchange rate system is to maintain a country's currency value within a
very narrow band. Also known as pegged exchange rate.
- Fixed-For-Fixed Swaps
An arrangement between two parties (known as counterparties) in
which both parties pay a fixed interest rate that they could not
otherwise obtain outside of a swap arrangement.
- Fixed-For-Floating Swap
An advantageous arrangement between two parties (counterparties), in
which one party pays a fixed rate, while the other pays a floating rate.
- In currencies, this is the abbreviation for the Fiji Dollar.
- In currencies, this is the abbreviation for the Falkland Islands Pound.
In forex, the condition of being neither long nor short in a particular
currency. Also referred to as 'being square'.
- Flat On A Failure
A strategy of closing out of a position and taking profits if the security in
question moves up to a target level but fails to break through it. This
can be seen as a method of extracting what profit a trade has been
able to produce so far because the trader believes that further
movement past the target level is unlikely.
A point when traders shift from having more long positions to having
more short positions.
- Floating Exchange Rate
A country's exchange rate regime where its currency is set by the
foreign-exchange market through supply and demand for that particular
currency relative to other currencies. Thus, floating exchange rates
change freely and are determined by trading in the forex market. This is
in contrast to a "fixed exchange rate" regime.
- Foreign Currency Effects
The gain or loss on foreign investments due to changes in the relative
value of assets denominated in a currency other than the principal
currency with which a company normally conducts business. A rising
domestic currency means foreign investments will result in lower
returns when converted back to the domestic currency. The opposite is
true for a declining domestic currency.
- Foreign Exchange Dealers Association Of India (FEDAI)
An association of banks specializing in the foreign exchange activities
in India. The Foreign Exchange Dealers Association of India, which
was created in 1958, regulates the governing rules and determines
the commissions and charges associated with the interbank foreign
- Foreign Official Dollar Reserves (FRODOR)
A term coined by economist Ed Yardeni relating international liquidity to
the effect of foreign central banks on U.S. monetary policy. It is
measured as the sum of U.S. Treasury and U.S. agency securities held
by foreign banks.
- Foreign-Exchange Risk
1. The risk of an investment's value changing due to changes in
currency exchange rates.
2. The risk that an investor will have to close out a long or short
position in a foreign currency at a loss due to an adverse movement in
exchange rates. Also known as "currency risk" or "exchange-rate risk".
- Forex (FX)
The market in which currencies are traded. The forex market is the
largest, most liquid market in the world with an average traded value
that exceeds $1.9 trillion per day and includes all of the currencies in
- Forex Futures
An exchange-traded contract to buy or sell a specified amount of a
given currency at a predetermined price on a set date in the future. All
forex futures are written with a specific termination date, at which point
delivery of the currency must occur unless an offsetting trade is
made on the initial position.
- Forward Discount
In a foreign exchange situation where the domestic current spot
exchange rate is trading at a higher level then the current
domestic futures spot rate for a maturity period. A forward discount is
an indication by the market that the current domestic exchange rate is
going to depreciate in value against another currency.
- Forward Points
The number of basis points added to or subtracted from the current
spot rate to determine the forward rate. When points are added to the
spot rate, there is a forward points premium; when points are
subtracted from the spot rate, there is a points discount.
- Forward Premium
When dealing with foreign exchange (FX), a situation where the spot
futures exchange rate, with respect to the domestic currency, is trading
at a higher spot exchange rate then it is currently. A forward premium is
frequently measured as the difference between the current spot rate
and the forward rate, but any expected future exchange rate will
- Forward Rate Agreement (FRA)
An over-the-counter contract between parties that determines the rate
of interest, or the currency exchange rate, to be paid or received on an
obligation beginning at a future start date. The contract will determine
the rates to be used along with the termination date and notional value.
On this type of agreement, it is only the differential that is paid on the
notional amount of the contract. Also known as a "future rate
- In the currency market, this is the abbreviation for the British pound.
- In the currency market, this is the abbreviation for the Ghanian Cedi.
- In currencies, this is the abbreviation for the Gibraltar Pound.
- In currencies, this is the abbreviation for the Gambian Dalasi.
- In currencies, this is the abbreviation for the Guinea Franc.
- Gnomes of Zurich
A term used by British labor ministers during the 1964 Sterling Crisis to
refer to Swiss banks.
- Gold Standard
A monetary system in which a country's government allows its currency
unit to be freely converted into fixed amounts of gold and vice
versa. The exchange rate under the gold standard monetary system is
determined by the economic difference for an ounce of gold between
two currencies. The gold standard was mainly used from 1875 to 1914
and also during the interwar years.
- In currencies, this is the abbreviation for the Guatemala Quetzal.
- In currencies, this is the abbreviation for the Guyanese Dollar.
- Harami Cross
A trend indicated by a large candlestick followed by a doji that is
located within the top and bottom of the candlestick's body. This
indicates that the previous trend is about to reverse.
- Hard Currency
A currency, usually from a highly industrialized country, that is widely
accepted around the world as a form of payment for goods and
services. A hard currency is expected to remain relatively stable
through a short period of time, and to be highly liquid in the forex
- Hard Money
Describes gold/silver/platinum (bullion) coins. A government that uses
a hard money policy backs the value of the currency it uses with a
hard, tangible and lasting material that will retain its relative value over
A common acronym for the Hong Kong dollar, which is the currency of
Hong Kong. It is pegged to the U.S. dollar through the use of a linked
exchange rate system, where US$1 is kept in a range of HKD$7.75-
- In currencies, this is the abbreviation for the Honduran Lempira.
- In currencies, this is the abbreviation for the Haitian Gourde.
- In currencies, this is the abbreviation for the Hungarian Forint.
- In currencies, this is the abbreviation for the Indonesian Rupiah.
- In currencies, this is the abbreviation for the Israeli New Shekel.
- Inconvertible Currency
A situation where one currency cannot be exchanged for another
currency because of foreign exchange regulations or physical barriers.
Inconvertible currencies may be restricted from trade due to extremely
high volatility or political sanctions.
- Indicative Quote
In forex trading, a currency quote that is provided by a market maker to
a trading party but that is not firm. In other words, when a market
maker provides an indicative quote to a trader, the market maker is not
obligated to trade the given currency pair at the price or the
quantity stated in the quote. Contrast this to a firm quote, in which
a market maker guarantees a specified bid or ask price to a trader up
to the maximum quantity specified in the quote.
- Indirect Quote
A foreign exchange rate quoted as the foreign currency per unit of the
domestic currency. In an indirect quote, the foreign currency is a
variable amount and the domestic currency is fixed at one unit.
- Initial Claims
A measurement of the number of jobless claims filed by individuals
seeking to receive state jobless benefits. This number is watched
closely by financial analysts because it provides insight into the
direction of the economy. Higher initial claims positively correlate with a
weakening economy, and vice versa for lower initial claims.
- In currencies, this is the abbreviation for the Indian Rupee.
- Interbank Market
The financial system and trading of currencies among banks and
financial institutions, excluding retail investors and smaller trading
parties. While some interbank trading is performed by banks on behalf
of large customers, most interbank trading takes place from the banks'
- Interbank Rate
The rate of interest charged on short-term loans made between
banks. Banks borrow and lend money in the interbank market in order
to manage liquidity and meet the requirements placed on them. The
interest rate charged depends on the availability of money in the
market, on prevailing rates and on the specific terms of the contract,
such as term length.
- Interest Rate Differential (IRD)
A differential measuring the gap in interest rates between two similar
interest-bearing assets. Traders in the foreign exchange market use
interest rate differentials when pricing forward exchange rates. Based
on the interest rate parity, a trader can create an expectation of the
future exchange rate between two currencies and set the premium (or
discount) on the current market exchange rate futures contracts.
- Interest Rate Parity
A theory that the interest rate differential between two countries is
equal to the differential between the forward exchange rate and the
spot exchange rate. Interest rate parity plays an essential role in
foreign exchange markets, connecting interest rates, spot exchange
rates and foreign exchange rates.
- International Fisher Effect (IFE)
An economic theory that states that an expected change in the current
exchange rate between any two currencies is approximately equivalent
to the difference between the two countries' nominal interest rates for
E = I1 – I2 ≈ i1 – i2
1 + i2
"E" represents the % change in the exchange rate
"i1" represents country A's interest rate
"i2" represents country B's interest rate
- International Foreign Exchange Master Agreement (IFEMA)
An agreement set forth by the Foreign Exchange Committee that
reflects the best practices for transactions in the foreign exchange
market. IFEMA was published in 1997 and sponsored by the British
Bankers Association, Canadian Foreign Exchange Committee and the
Tokyo Foreign Exchange Market Practices Committee.
- International Monetary Fund (IMF)
An international organization created for the purpose of:
1. Promoting global monetary and exchange stability.
2. Facilitating the expansion and balanced growth of international trade
3. Assisting in the establishment of a multilateral system of payments
for current transactions.
- Inward Arbitrage
A form of arbitrage involving rearranging a bank's cash by borrowing
from the interbank market, and re-depositing the borrowed money
locally at a higher interest rate. The bank will make money on the
spread between the interest rate on the local currency, and the interest
rate on the borrowed currency.
- In currencies, this is the abbreviation for the Iraqi Dinar.
- In currencies, this is the abbreviation for the Iranian Rial.
- In currencies, this is the abbreviation for the Iceland Krona.
- ISO Currency Code
The internationally standardized three-letter abbreviation for a country's
- In currencies, this is the abbreviation for the Jamaican Dollar.
- In currencies, this is the abbreviation for the Jordanian Dina.
- In currencies, this is the abbreviation for the Kenyan Shilling.
- In currencies, this is the abbreviation for the Cambodian Riel.
A slang term for the New Zealand dollar (NZD). It derives its name from
New Zealand's national icon - a flightless bird called a kiwi - which is
pictured on one side of the country's $1 coin.
- In currencies, this is the abbreviation for the Comoros Franc.
- In currencies, this is the abbreviation for the North Korean Won.
- In currencies, this is the abbreviation for the Korean Won.
- In currencies, this is the abbreviation for the Kuwaiti Dinar.
- In currencies, this is the abbreviation for the Cayman Islands Dollar
- In currencies, this is the abbreviation for the Kazakhstan Tenge.
- In currencies, this is the abbreviation for the Laos Kip
- Law Of One Price
The theory that the price of a given security, commodity or asset will
have the same price when exchange rates are taken into consideration.
The law of one price is another way of stating the concept of
purchasing power parity.
- Lawful Money
Any form of currency issued by the United States Treasury and not the
Federal Reserve System, including gold and silver coins, Treasury
notes and Treasury bonds. Lawful money stands in contrast to fiat
money, to which the government assigns value although it has no
intrinsic value of its own and is not backed by reserves. Fiat
money includes legal tender such as paper money, checks, drafts and
bank notes. Also known as "specie", which means "in actual form."
- In currencies, this is the abbreviation for the Lebanese Pound.
- Leads And Lags
The alteration of normal payment or receipts in a foreign exchange
transaction because of an expected change in exchange rates. An
expected increase in exchange rates is likely to speed up payments,
while an expected decrease in exchange rates will probably slow them
- Linked Exchange Rate System
A system of managing a nation's currency and exchange rate by linking
the national currency to another base currency that is held at a fixed
ratio in deposit at domestic banks.
Once the exchange rate is set, there is typically no interference from
the government or through monetary policy decisions that will affect the
exchange rate. Currency is only issued when there are reserves in the
linked currency to back it up. If the exchange rate begins to shift from
the fixed ratio, currency is immediately added to or taken out of
circulation to bring the ratio back into balance.
- Liquidation Level
In forex trading, the specific value of a trader's account below which the
liquidation of the trader's positions is automatically triggered and
executed at the best available exchange rate at the time. The
liquidation level is expressed as a percentage value of assets. If a forex
trader's positions go against him or her, his or her account will
eventually reach the liquidation level, unless the trader contributes
further margin to top up his or her account.
- In currencies, this is the abbreviation for the Sri Lankan Rupee.
A slang term for a Canadian dollar. It is derived from the picture of a
loon on one side of the coin.
- Losing The Points
A currency trading term that describes when the banks' buying price in
the forward market is lower than the selling price in the spot market. A
trader is losing the points when he or she buys at one price now and
then agrees to sell for less in the future. This is the opposite of earning
- In currencies, this is the abbreviation for the Liberian Dollar.
- In currencies, this is the abbreviation for the Lesotho Loti.
- In currencies, this is the abbreviation for the Lithuanian Litas.
- In currencies, this is the abbreviation for the Latvian Lat.
- In currencies, this is the abbreviation for the Libyan Dinar.
- In currencies, this is the abbreviation for the Moroccan Dirham.
- Mine and Yours
Terms used by floor traders to signify buying and selling. Mainly
used in forex transactions.
- Minimum Price Contract
A forward contract with a provision guaranteeing a minimum price at
delivery of the underlying agricultural commodity.
- In currencies, this is the abbreviation for the Myanmar Kyat.
- In currencies, this is the abbreviation for the Mongolian Tughrik.
- Monetary Base
The total amount of a currency that is either circulated in the hands of
the public or in the commercial bank deposits held in the central bank's
reserves. This measure of the money supply typically only includes the
most liquid currencies. Also known as the "money base".
- Monetary Policy
The actions of a central bank, currency board or other regulatory
committee that determine the size and rate of growth of the money
supply, which in turn affects interest rates.
- Monetary Reserve
A nation's assets in foreign currency and/or commodities like gold and
silver, which are used to back up the national currency. Monetary
reserves also provide a cushion for executing central banking functions
like adding to the money supply and settling foreign exchange
contracts in local currencies.
- Money Supply
The entire quantity of bills, coins, loans, credit and other liquid
instruments in a country's economy.
- In currencies, this is the abbreviation for the Macau Pataca
- In currencies, this is the abbreviation for the Mauritanian Ouguiya.
- In currencies, this is the abbreviation for the Maltese Lira.
- In currencies, this is the abbreviation for the Mauritius Rupee.
- In currencies, this is the abbreviation for the Maldive Rufiyaa.
- In currencies, this is the abbreviation for the Malawi Kwacha.
- In the currency market, this is the abbreviation for the Mexican peso.
- In currencies, this is the abbreviation for the Malaysian Ringgit
- In currencies, this is the abbreviation for the Mozambique Metical.
- In currencies, this is the abbreviation for the Namibia Dollar.
- In currencies, this is the abbreviation for the Nigerian Naira.
- In currencies, this is the abbreviation for the Nicaraguan Cordoba
- In currencies, this is the abbreviation for the Norwegian Krone.
- Nominal Effective Exchange Rate (NEER)
The unadjusted weighted average value of a country's currency relative
to all major currencies being traded within an index or pool of
currencies. The weights are determined by the importance a home
country places on all other currencies traded within the pool, as
measured by the balance of trade.
- Nonconvertible Currency
Any currency that is used primarily for domestic transactions and is not
openly traded on a forex market. This usually is a result of government
restrictions, which prevent it from being exchanged for foreign
currencies. Also known as a "blocked currency".
- Noon Rate
A term used by the Bank of Canada to describe the foreign exchange
rate between the U.S. dollar and the Canadian dollar. The rate is
released by 12:45pm EST by the Bank of Canada on any given day,
and is based on the trading that takes place from 11:59am to 12:01pm
on that day. The noon rate is often used by companies as a benchmark
for translating financial statements.
- Nostro Account
- An account that a bank holds with a foreign bank.
- In currencies, this is the abbreviation for the Nepal Rupee.
In the currency market, this is the abbreviation for the New Zealand
- In currencies, this is the abbreviation for the Oman Rial.
- One-Touch Option
A type of exotic option that gives an investor a payout once the price of
the underlying asset reaches or surpasses a predetermined barrier.
This type of option allows the investor to set the position of the barrier,
the time to expiration and the payout to be received once the barrier is
broken. Only two outcomes are possible with this type of option:
1) the barrier is breached and the trader collects the full payout
agreed upon at the outset of the contract, OR
2) the barrier is not breached and the trader loses the full premium paid
to the broker.
- Outward Arbitrage
A form of arbitrage involving the rearrangement of a bank's cash by
taking its local currency and depositing it into eurobanks. The interest
rate will be higher in the interbank market, which will enable the bank to
earn more on the interest it receives for the use of its cash.
- Overnight Trading
The buying or selling of currencies between 9pm and 8am local time.
This type of transaction occurs when an investor takes a position at the
end of the trading day in a foreign market that will be open while the
local market is closed. The trade will be executed sometime that
evening or early morning.
- In currencies, this is the abbreviation for the Panama Balboa.
- Panel Bank
The name given to the group of banks contributing to the EURIBOR.
This group is made up of the largest participants within the Euro money
- Parallel Loan
A type of foreign exchange loan agreement that was a precursor to
currency swaps. A parallel loan involves two parent companies taking
loans from their respective national financial institutions and then
lending the resulting funds to the other company's subsidiary.
A method of stabilizing a country's currency by fixing its exchange rate
to that of another country.
- In currencies, this is the abbreviation for the Peruvian Nuevo Sol.
- In currencies, this is the abbreviation for the Papua New Guinea Kina.
- In currencies, this is the abbreviation for the Philippine Peso.
The smallest price change that a given exchange rate can make. Since
most major currency pairs are priced to four decimal places, the
smallest change is that of the last decimal point - for most pairs this is
the equivalent of 1/100th of one percent, or one basis point.
- In currencies, this is the abbreviation for the Pakistani Rupee.
- In currencies, this is the abbreviation for the Polish Zloty.
- Pre-Settlement Risk
The risk that one party of a contract will fail to meet the terms of the
contract and default before the contract's settlement date, prematurely
ending the contract. This type of risk can lead to replacement-cost risk.
- Purchasing Power Parity (PPP)
An economic theory that estimates the amount of adjustment
needed on the exchange rate between countries in order for the
exchange to be equivalent to each currency's purchasing power.
The relative version of PPP is calculated as:
S = P1 + P2
"S" represents exchange rate of currency 1 to currency 2
"P1" represents the cost of good "x" in currency 1
"P2" represents the cost of good "x" in currency 2
- In currencies, this is the abbreviation for the Paraguay Guarani.
- In currencies, this is the abbreviation for the Qatar Riyal.
- Quanto Swap
A swap with varying combinations of interest rate, currency and equity
swap features, where payments are based on the movement of two
different countries' interest rates. This is also referred to as a
differential or "diff" swap.
- Quote Currency
The second currency quoted in a currency pair in forex. In a direct
quote, the quote currency is the foreign currency. In an indirect quote,
the quote currency is the domestic currency.
- Real Effective Exchange Rate (REER)
The weighted average of a country's currency relative to an index or
basket of other major currencies adjusted for the effects of inflation.
The weights are determined by comparing the relative trade balances,
in terms of one country's currency, with each other country within the
The process whereby a country's currency is recalibrated due to
significant inflation and currency devaluation. Certain currencies have
been redenominated a number of times over the last century for
The process of converting a foreign currency into the currency of one's
own country. The amount that the investor will receive depends on the
exchange rate between the two currencies being traded at the
- Reserve Currency
A foreign currency held by central banks and other major financial
institutions as a means to pay off international debt obligations, or to
influence their domestic exchange rate.
A calculated adjustment to a country's official exchange rate relative
to a chosen baseline. The baseline can be anything from wage rates
to the price of gold to a foreign currency. In a fixed exchange rate
regime, only a decision by a country's government (i.e. central
bank) can alter the official value of the currency. Contrast to
- Revaluation Rates
Market currency rates from a specific point in time that are used as a
base value by currency traders to assess whether a profit or a loss
has been realized for the day. In most cases, the revaluation rate is the
closing rate for the previous trading day.
- In currencies, this is the abbreviation for the Romanian New Leu.
- In currencies, this is the abbreviation for the Russian ruble.
- In currencies, this is the abbreviation for the Saudi Riyal.
- In currencies, this is the abbreviation for the Solomon Islands Dollar
- In currencies, this is the abbreviation for the Seychelles Rupee.
- In currencies, this is the abbreviation for the Sudanese Dinar.
- In currencies, this is the abbreviation for the Sudanese Pound
The difference between the value of money and the cost to produce it -
in other words, the economic cost of producing a currency within a
given economy or country. If the seigniorage is positive, then the
government will make an economic profit; a negative seigniorage will
result in an economic loss.
- In currencies, this is the abbreviation for the Swedish Krona.
- Settlement Period
The period of time between the settlement date and the transaction
date that is allotted to the parties of a transaction to satisfy the
transaction's obligations. The buyer must make payment within the
settlement period, while the seller must deliver the purchased security
within this period.
- Settlement Risk
The risk that one party will fail to deliver the terms of a contract with
another party at the time of settlement. Settlement risk can be the risk
associated with default at settlement and any timing differences in
settlement between the two parties. This type of risk can lead to
- In currencies, this is the abbreviation for the Singapore Dollar.
- In currencies, this is the abbreviation for the St. Helana Pound
- Single Payment Options Trading (SPOT)
A type of option product that allows an investor to set not only the
conditions that need to be met in order to receive a desired payout, but
also the size of the payout he or she wishes to receive if the
conditions are met. The broker that provides this product will determine
the likelihood that the conditions will be met and, in turn, will charge
what it feels is an appropriate commission. This type of arrangement is
often referred to as a "binary option" because only two types of payouts
are possible for the investor:
1. The conditions set out by both parties occur, and the investor
collects the agreed-upon payout amount.
2. The event does not occur and the investor loses the full premium paid to the broker.
- In currencies, this is the abbreviation for the Slovenian Tolar.
- In currencies, this is the abbreviation for the Slovak Koruna.
- In currencies, this is the abbreviation for the Sierra Leone Leone.
- In currencies, this is the abbreviation for the Sri Lankan rupee.
- Soft Currency
Another name for "weak currency". The values of soft currencies
fluctuate often, and other countries do not want to hold these
currencies due to political or economic uncertainty within the country
with the soft currency.
- In currencies, this is the abbreviation for the Somali Shilling.
- Sovereign Risk
The risk that a foreign central bank will alter its foreign-exchange
regulations thereby significantly reducing or completely nulling the
value of foreign-exchange contracts.
- Special Drawing Rights (SDR)
An international type of monetary reserve currency, created by the
International Monetary Fund (IMF) in 1969, which operates as a
supplement to the existing reserves of member countries. Created in
response to concerns about the limitations of gold and dollars as the
sole means of settling international accounts, SDRs are designed to
augment international liquidity by supplementing the standard reserve
A person who trades derivatives, commodities, bonds, equities or
currencies with a higher-than-average risk in return for a higher-thanaverage
profit potential. Speculators take large risks, especially with
respect to anticipating future price movements, in the hope of making
quick, large gains.
- Spot Exchange Rate
The rate of a foreign-exchange contract for immediate delivery. Also
known as "benchmark rates", "straightforward rates" or "outright rates",
spot rates represent the price that a buyer expects to pay for a foreign
currency in another currency.
- Spot Trade
The purchase or sale of a foreign currency or commodity for immediate
delivery. Spot trades are settled "on the spot", as opposed to at a set
date in the future. Also known as "cash trades".
Futures transactions that expire in the current month are also known as
spot trades because in the case that goods are actually delivered,
delivery time is reasonably expected to take one month.
- In currencies, this is the abbreviation for the Suriname Dollar.
- In currencies, this is the abbreviation for the Sao Tome/Principe Dobra.
A form of monetary action in which a central bank or federal reserve
attempts to insulate itself from the foreign exchange market to
counteract the effects of a changing monetary base. The sterilization
process is used to manipulate the value of one domestic
currency relative to another, and is initiated in the forex market.
- Sterilized Intervention
A method used by monetary authorities to equalize the effects of
foreign exchange transactions on the domestic monetary base by
offsetting the purchase or sale of domestic assets within the
domestic markets. The process limits the amount of domestic
currency available for foreign exchange.
- In currencies, this is the abbreviation for the El Salvador Colon.
A slang term for the Swiss franc. The Swiss franc, or Swissie, has often
been considered a safe-haven currency during times of geopolitical
unrest. This is mainly due to the country's neutral stance in global
- In currencies, this is the abbreviation for the Syrian Pound.
- In currencies, this is the abbreviation for the Swaziland Lilangeni.
- Take-Profit Order (T/P)
An order used by currency traders specifying the exact rate or number
of pips from the current price point where to close out their current
position for a profit. The rate deemed to be the level where the trader
wants to take a profit is sometimes referred to as the "take-profit point".
- Temporal Method
A method of foreign currency translation that uses exchange rates
based on the time assets and liabilities are acquired or incurred. The
exchange rate used also depends on the method of valuation that is
used. Assets and liabilities valued at current costs use the current
exchange rate and those that use historical exchange rates are valued
at historical costs.
- In currencies, this is the abbreviation for the Thai Baht.
- Thin Market
A market with a low number of buyers and sellers. Since few
transactions take place in a thin market, prices are often more volatile
and assets are less liquid. The low number of bids and asks will also
typically result in a larger spread between the two quotes. Also known
as a "narrow market".
- In currencies, this is the abbreviation for the Tunisian Dinar.
- Tomorrow Next (Tom Next)
In currency transactions, the purchase and sale of a currency made to
avoid taking actual delivery of the currency. The current position is
closed out at the daily close rate and re-entered at the new opening
rate the next trading day. Also referred to as "tomorrow next
- In currencies, this is the abbreviation for the Tonga P'anga
- Transaction Exposure
The risk, faced by companies involved in international trade, that
currency exchange rates will change after the companies have already
entered into financial obligations. Such exposure to fluctuating
exchange rates can lead to major losses for firms.
- Transaction Risk
The exchange rate risk associated with the time delay between
entering into a contract and settling it. The greater the time differential
between the entrance and settlement of the contract, the greater the
transaction risk, because there is more time for the two exchange rates
- In currencies, this is the abbreviation for the Turkish New Lira.
- In currencies, this is the abbreviation for the Trinidad & Tobago Dollar.
- In currencies, this is the abbreviation for the Taiwan Dollar.
- Two-Way Quote
A type of quote that gives both the bid and the ask price of a security,
informing would-be traders of the current price at which they could buy
or sell the security. The two-way quote also shows the spread between
the bid and the ask, giving traders an idea of the current liquidity in the
security (a smaller spread indicates more liquidity).
- In currencies, this is the abbreviation for the Tanzanian Shilling.
- U.S. Dollar Index (USDX)
A measure of the value of the U.S. dollar relative to majority of its most
significant trading partners. This index is similar to other trade-weighted
indexes, which also use the exchange rates from the same major
- In currencies, this is the abbreviation for the Ukraine Hryvnia.
- In currencies, this is the abbreviation for the Uganda Shilling
- Uncovered Interest Rate Parity (UIP)
A parity condition stating that the difference in interest rates between
two countries is equal to the expected change in exchange rates
between the countries’ currencies. If this parity does not exist, there is
an opportunity to make a profit.
(i1 – i2) = E (e)
"i1" represents the interest rate of country 1
"i2" represents the interest rate of country 2
"E(e)" represents the expected rate of change in the exchange rate
- Unsterilized Foreign Exchange Intervention
An attempt by a country's monetary authorities to influence exchange
rates and its money supply by not buying or selling domestic or foreign
currencies or assets. This is a passive approach to exchange rate
fluctuations, and allows for fluctuations in the monetary base.
- In currencies, this is the abbreviation for the U.S. dollar.
- In currencies, this is the abbreviation for the Uruguayan Peso.
- In currencies, this is the abbreviation for the Venezuelan Bolivar.
- In currencies, this is the abbreviation for the Vietnamese Dong
- In currencies, this is the abbreviation for the Vanuatu Vatu.
- In currencies, this is the abbreviation for the Samoan Tala.
A currency that trades in markets outside of its domestic borders.
"Xeno" is a prefix meaning foreign or strange.
- Slang for one billion units in currency.
- In currencies, this is the abbreviation for the South African Rand.
- In currencies, this is the abbreviation for the Zambian Kwacha.
- In currencies, this is the abbreviation for the Zimbabwe Dollar.