The total demand in a particular country’s economy for goods and services. It includes the demand of both the private and public sectors as well as consumers and foreign firms.

A term referring to the rise of a particular currency as a result of the demands of the market in contrast to government intervention.

When relating to the forex market, this term refers to the right to obtain from a counterparty a quantity of a currency in exchange for a balance sheet asset like a loan, or, alternatively, to receive the amount a an agreed future time via an unmatched forward or spot deal.

An instruction to obtain a specific rate or even better.

A term that refers to settlement and related issues.

This term related to the boundaries between which a particular currency is allowed to fluctuate.

This is the currency in which a bank or financial institution chooses to announce its operating results.

One basis point is the equivalent of one hundredth of one percent. In other words: 25 basis points equal 0.25%

Also referred to as ‘a unit of account’, this is a collection of different currencies. Commonly, it is used to manage the exchange rate of a currency.

This refers to the price at which a trader or investor has offered to buy a currency or asset.

After the turmoil of the Great Depression, this 1944 agreement was set up to create a fixed exchange rate regime, and therefore global economic stability. It fixed the exchange rates of the major currencies to the greenback or U.S. dollar and established the price of gold at $35. The treaty demanded that countries’ central banks intervened to safeguard the fixed exchange rates. The Federal Reserve, the central bank of the U.S. had to exchange dollars for gold, and this ultimately led to the end of this system. In the U.S. when demand for the greenback waned, and gold reserves declined, in 1971, U.S. President Richard Nixon ended the exchange of dollars for gold, which was essentially the system’s demise.

The opposite of a bear: a Bull is an individual who predicts that a market’s prices will increase. The adjective to describe them, and also a market that is rising or expected to rise, is bullish.

This is forex slang for the pound sterling’s exchange rate with the U.S. dollar (GBP/USD). The name derives from the cable laid under the Atlantic during the mid-19th century to connect the tickertape machines in New York and London.

This is the costs in interest incurred by a trader or investor as a result of financing securities or other financial instruments they may hold.

This is when an asset is bought today and then a future contract on the asset is sold.

This is an actual financial instrument’s market, which futures or options contracts are based.

These are traders who analyze graphs and charts of historic data to find trends to then be able to forecast reversals. They look for resistance levels, head and shoulders patterns, and double-bottom or double-top patterns.

This is a transaction where an investor’s trade of a specific currency is closed and they have therefore zero net commitment to future market fluctuations in the rate.

This is the fee that a broker charges traders for dealing for them.

This refers to financial and economic crises spreading from one country’s market to other nations and regions. It was coined following the Asian Financial Crisis in 1997. That crisis originated in Thailand but soon worked its way into other East Asian economies.

This refers to the mechanism of exchanging an asset or liability denominated in one currency for an asset or liability denominated in another currency.

FX expression for the Danish krone, derived from the country’s capital, Copenhagen.

When a trader buys another currency versus the U.S. dollar, the counter value is the value of the transaction in U.S. dollars.

This can mean either taking on a forward foreign exchange contract or ending a short position via purchasing currencies or securities that have been sold.

This is a means of exchange rate adjustment. The rate is fixed, or ‘pegged’, but changes with time due to specific economic indicators.

The exchange rate between two non-U.S. currencies.

Traders whose asset positions are liquidated the same trading day they are opened.

The main means of recording the essential information connected to a transaction.

Difference between real and nominal GDP. It is the same as the overall inflation rate.

A decrease in the rate of a currency due to market forces rather than as a result of government or other official action.

All the information required to finalize an FX. For instance: name, rate, dates and point of delivery.

When the fixed units of another currency are quotes versus the variable quantities of the domestic currency.

A modest decrease in the price of an asset.

An economic data releases that indicates the current state of the economy. Examples include GDP, employment, and inflation.

A summary of the impacts on a nation's trade balance from its currency's fluctuations versus other currencies.

European Monetary System.

This is option that can be exercised only from the date of expiry. By contrast, American options can be exercised during the option period.

The exposure or potential losses an investor or company could incur due to a change in exchange rates.

Exotics are less-commonly traded currencies.

There are three methods of calculation: first, net working capital – current liabilities in the currency subtracted from the current assets in a currency; two, net financial method – current liabilities and long term debt in the currency subtracted from the current assets in a foreign currency; third, the monetary/non-monetary method – monetary assets and liabilities in the related currency are valued at their current exchange rates, while non-monetary items are added at the pertinent historic rates.

The Federal Reserve, the United States’ central bank.

The central bank system of the U.S. is made up of 12 Federal Reserve Banks which each cover a districts under the Federal Reserve Board.

This is the official rate for a currency set by a country’s monetary authorities. Usually, the rate allows movement within a band.

These are currency exchange rates whereby the price is a result of market forces. Note that even floating currencies are subject to intervention by central banks. When interventions become common, the float is known as a dirty float.

The buying or selling of one currency against another.

These are Discounts or premiums between a currency’s spot rate and its forward rate. They are quoted in points.

This is a promise to buy or sell a currency for delivery on a specified future date. The price is quoted as the spot rate minus or plus the forward points for the agreed upon period.

Forward rates are quoted in terms of forward points (see above). To calculate the forward rate from the actual exchange rate, the forward points are either added or subtracted from the exchange rate. The decision to subtract or add points is connected to the differential between the deposit rates for both currencies involved.

These are macro economic factors that are considered to form the base or foundation of the price of a currency. They include: GDP, inflation, trade balance, government deficit and interest rates.

The G7 plus various developing countries of economic importance like China, India, Brazil, Russia and Indonesia.

G7 plus Russia.

The selling of a currency or financial instrument.

The total value of a specific country's output, income or expenditure produced domestically (i.e. within the nation's geographical borders).

This is a pattern in price trends which technical analysts argue indicates a reversal in the trend. To explain: the price has risen, but at the top of the "left shoulder", profit-taking results in the price dropping or selling; the price then increases sharply again to the so-called head before yet more profit-taking causes it to fall to basically the same level as the "shoulder". An additional modest rise in the price suggests that more weakening will occur. A fall below "the neckline" is a sign to sell.

The International Monetary Fund, which was created in 1946 with the goal of providing global liquidity on a short and medium term basis as well as working for the liberalization of exchange rates. The fund aids nations with balance of payments problems with the provision of loans.

This is the interest rate calculated by working out the difference between spot and forward rates.

The rates banks or brokers quote their counterparts for trades between separate banks.

One currency achieves interest parity with another one when the difference in the interest rates is balanced by the forward exchange margins.

This refers to currencies that are commonly used to denominate trade and credit transactions by non-residents of the country of issue. Prominent examples are the U.S. Dollar and Swiss Franc.

Slang for the New Zealand Dollar.

In foreign exchange this refers to a promise to deliver a specific amount of currency at a specified date in the future.

A transaction which involves the termination of an open position.

The study of economics relating to nations and large demographics.

Term referred to when a dealer publicly reveals the bid and offer prices at which he/she will enter or exit a market.

In foreign exchange, this term refers to the amount which an investor must have on hand in order to make an investment in futures.

Account method used to value an asset in the prices which it would fetch if sold today.

An order to immediately buy or sell an asset at the current market price.

The mid-point between the ask price and bid price of an asset.

Is calculated by adding the total amount of legal tender in circulation, with the amount of deposits held by a bank at the central bank.

Is calculated by taking the average price of an asset over a specified time period.

The amount of currency purchased or sold, not yet offset by opposing transactions.

Term used when a trader is buying or selling a non-standard amount of an asset in a transaction.

The price which a seller is willing sell his/her asset.

An order which when executed, cancels all or part of another order.

A deal which is allowed to pass into the next trading day.

The valuation of a currency in dominated in another.

Foreign exchange regime whereby one currency’s price is fixed against another, and move along with the latter’s price in the open market.

A position denotes how a trader is placed within a given market. A long position means that the trader has purchased the asset with the view that it will increase in value. A short position means a trader is selling the asset in hopes that its price will fall.

Action taken by which an individual profitably liquidates a position at a predetermined price.

Is the price disseminated to an individual for the purchase or sale of a certain asset.

The recorded difference between the highest and lowest price of a future during a trading session.

When prices decline following an advance.

A forecasted price level where the rate of exchange should encounter selling pressure and stop the price from rising any further.

The rate for any period or currency which is used to revalue a position.

An asset or liability that is exposed to changes in value either through fluctuations in exchange rates or interest rates.

The buying and selling a specified amount of currency.

Rate at which a bank is willing to sell foreign currency.

The risk associated with the non-settlement of the transaction by the other party.

Usually made in expectation of a decline in the price, it is the sale of a specified amount of currency that is not owned by the seller at the time of the trade.

A major currency that is lightly traded because of increased market interest in another currency pair.

(Or spot date) Buying and selling forex with the current date's price for valuation, but where settlement usually takes place in two days.

The price at which the currency is currently trading in the spot market.

An active market that can handle both large sales and large purchases of currency without major moves.

Slang for Swedish Krona.

The price at which the option buyer can buy or sell the underlying currency.

The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction.

A pair of forward transactions performed so as to speculate regarding changes in interest rates of currency pairs which are being traded.

An order placed by the trader, to ensure that the trade is automatically closed at a certain predefined profit level.

An adjustment to price based on technical factors such as volume and charting.

A minimum change in price either up or down.

The smallest transaction size accepted.

The date on which a trade occurs.

When a dealer quotes both the buying and selling rates for foreign exchange.

When a currency is below its purchasing power parity.

A transaction executed at a price greater than the previous transaction.

A measure of the amount an asset price is expected to fluctuate over a given period of time.

A deal that doesn’t produce a loss or a gain.

Analyst’s predictions regarding economic indicators that are not made public but become public through leaks.

Refers to a billion.