Also referred to as the offer price. The price at which the market is willing to sell.
The first currency in a currency pair; it shows how much the base currency is worth against a second currency. For example, if the USD/EUR rate equals 1.1299 then one US dollar is worth 1.1299 EUR.
Bear (Bearish) Market
Pessimistic outlook; favoring declining market conditions.
The opposite of an ask price; the price at which the market is willing to pay.
Bull (Bullish) Market
Optimistic outlook; favoring strengthening market conditions.
Nickname for the GBP/USD currency pair.
A government organization that manages a country’s monetary policy.
Currencies which depend heavily on the export of certain raw materials i.e. oil, timber, iron, coal and aluminum.
Consumer Price Index (CPI)
A measure of the average change in prices of a basket of consumer goods over a period of time.
An exchange rate between two currencies, in which neither is the currency of the country where the pair is quoted. For example, in the US, a EUR/JPY quote is considered a cross rate.
Two currencies that make up a foreign exchange rate.
Unpredictable profits or losses associated with the change in price of one currency in relation to another; can be reduced by hedging, which offsets currency fluctuations.
Three letter symbol that represents a specific currency; for example, USD (U.S. Dollar).
Refers to policymakers who support lower interest rates.
To pull from a total amount either in part of in full.
The value of one currency for the purpose of conversion to another.
Amount an investor stands to lose in an investment.
Fixed Date Forward
Buy or sell currency with delivery for a specific date, up to 12 months in advance.
The global marketplace where participants can buy, sell or exchange currencies.
Agreement to buy/ sell currency at a pre-specified exchange rate, with added forward points, at a future date.
Pips, based on interest rate differentials, added to or subtracted from the current exchange rate in order to calculate a forward price.
Group of seven nations, which include: United States, Canada, Japan, United Kingdom, Germany, France and Italy.
Same member countries as G7, plus Russia.
Nickname for the US dollar.
Opposite of Dovish; refers policy makers who support higher interest rates.
An investment to reduce currency risk, normally through products like standing orders or forward contracts.
Value of a position protected through the use of a hedge compared with the size of the entire position itself.
Increase in consumer good prices and decrease in purchasing power.
Foreign exchange rates that large international banks quote each other.
ISM Manufacturing Index
Monthly index based on more than 400 surveys of non-manufacturing firms by the Institute of Supply Management. Values over 50 indicate growth in the non-manufacturing sector.
Job Openings and Labor Turnover Survey (JOLTS)
Monthly survey by the US Bureau of Labor Statistics that measures job vacancies.
Purchasing currency with the expectation that the value of the asset will rise; for example, when the base currency is bought the position is long.
Nickname for the USD/CAD currency pair.
Request for additional funds on a position that has moved against the customer.
Risk management tool used to place a buy/ sell order once the spot rate reaches a pre-defined level.
Series of forwards with different settlement dates but a common exchange rate.
The smallest incremental move an exchange rate can make; one hundredth of a percent (0.0001).
The amount by which the forward price exceeds the spot price.
Purchasing Managers Index (PMI)
Economic indicator of the manufacturing industry, based on five areas: new orders, inventory levels, production, supplier deliveries and employment environment.
When a central bank injects money into an economy with the hope of stimulating growth.
Indicative market price used for information purposes.
A recovery in price after a period of decline.
The price level where a currency has difficulty strengthening thus may begin weakening as a result.
A monthly economic indicator complied and released by the Census Bureau and the Department of Commerce. Measures sales of all goods and services sold by retailers for the previous month.
Exposure to uncertain change in the market.
Utilization of analysis and products to reduce/ control exposure to risk.
Currency that is viewed as stable enough to keep its value relative to other currencies in times of economic uncertainty.
Investment positions that benefits from a decline in market price; for example, when the base currency is sold the position is short.
The current exchange rate that a currency pair can be bought or sold at.
Purchase/ sale of currency for immediate delivery, as opposed to sometime in the future.
Nickname for the GBP/USD currency pair.
Order to buy/ sell at a pre-defined level in order to limit a loss.
Opposite of a resistance level; price level where a currency has, historically, had difficulty falling past.
Order to buy/ sell a pre-defined level in order to secure a profit.
Process of reviewing past price patterns for clues as to the direction of future price movements.
Measure of the total workforce that is unemployed and actively seeking employment.
Also referred to as the maturity date. The delivery date of funds traded; for spot trades it is normally two days after the transaction date.
Degree of change in the value of a currency over time. For example, high volatility is associated with a high degree of risk.
Set a timeframe that lets you draw funds as needed from the forward contract as often as you like, until the end of the window.
Percentage return from an investment.