What is? (A to I)

BEAR MARKET
= a financial or other market where prices are declining.

BID
= the exchange rate at which a dealer is willing to buy currency.

BULL MARKET
= a financial or other market where prices are rising.

BROKER
= a middle man who works between buyers and sellers, and charges a commission.

CABLE
= the Sterling/US Dollar exchange rate.

CALL RATE
= the interbank interest rate on funds which are not deposited for a fixed period.

CASH MARKET
= the buying and selling of physical currency.

CONVERTIBLE CURRENCY
= a currency which can be freely exchanged, without special government or central bank permission, for gold or other currencies.

CROSS
= an exchange rate that does not involve the US Dollar. EG The Euro/Yen is called a cross.

DAY TRADING
= the opening and closing of the same position or positions within the same trading day.

DOLLAR RATE
= when a variable amount of foreign currency is quoted against one US Dollar. The exception is Sterling/US Dollar (Cable) which is quoted as US Dollars against one Pound Sterling.

EMS
= European Monetary System

EMU
= European Monetary Union

ERM
= Exchange Rate Mechanism

EXCHANGE RATE DEPRECIATION
= when a currency falls in value against another (or others).

EXCHANGE RATE RISK
= the potential loss that could be incurred from an adverse movement in exchange rates.

FIXED EXCHANGE RATE
= an official rate of exchange set by monetary authorities. In practice, some fixed exchange rates are allowed to move within upper and lower limits.

FLAT (or SQUARE)
= when a client has not traded in a currency, or where an earlier deal is reversed, creating a flat (neutral) position.

FLOATING EXCHANGE RATE
= when the value of a currency is decided by supply and demand.

FORWARD POINTS
= the Interest Rate differential between two currencies. The forward points are added or subtracted from the spot rate to give the forward or outright rate.

FORWARD RATE
= the rate agreed under a forward contract for settlement at a specified future date.

FORWARD CONTRACT
= contract struck today for the purchase or sale of foreign exchange at an agreed forward rate, on an agreed future date.

FUNDAMENTAL ANALYSIS
= analysis based on economic and political factors.

FX/FOREX
= Foreign Exchange

fxPaynet
= The Travelex online payment ordering system

GTC (Good Till Cancelled)
= an open ended order left with a dealer to buy or sell at a fixed price.

HEDGING
= a transaction that protects an asset or liability against changes in the foreign exchange rate.

INITIAL MARGIN
= the deposit required from a client when they book a forward contract.

INTERBANK RATES
= the exchange rates quoted by large international banks to each other. The difference between the buy rate and the sell rate (the spread) can be around 0.07%. Normally the public and other businesses do not have access to these rates.

INTEREST RATE RISK
= the potential for losses arising from changes in interest rates.

Currency Band

The currency band is a system of exchange rates by which a floating currency floating currency is backed by hard money.

A country selects a range, or "band", of values at which to set their currency, and returns to a fixed exchange rate if the value of their currency shifts outside this band. This allows for some revaluation, but tends to stabilize the currency's value within the band. In this sense, it is a compromise between a fixed (or "pegged") exchange rate and a floating exchange rate. For example, the exchange rate of the renminbi of the mainland of the People's Republic of China has recently been based upon a currency band; the European Economic Comunity's " Snake in the tunnel" was a similar concept that failed, but ultimately led to the establishment of the Europen Exchange Rate Mechanism (ERM) and ultimately the Euro.

Foreign Exchange Market

Foreign exchange market trading currencies. This means banks and other institutions that buy and sell currencies.

The purpose of the foreign exchange market, assists in international trade and investment. Foreign Exchange helps companies convert from one currency to another. For example, allow U.S. business for European goods for import and pay for the euro, although the company revenue in U.S. dollars.

In a typical purchase transaction exchange participant of one currency and pay the amount in another currency. The modern foreign exchange market began to take shape in 1970 when the country moved gradually a system of floating exchange rates as compared with the previous one, which remained after the Bretton Woods system of fixed.

The Forex market is unique because

* Trading volume,
* Extreme liquidity in the market,
* In geographical distribution,
* Long trading hours: 24 hours a day except on weekends (from 22:00 Sunday to 22:00 hours on Friday)
* Variety of factors that influence exchange.
* Low rate of profit in other markets of fixed comparison of income (profit, but may be high due to very large trading volumes)
* The use of borrowed funds

As such, it has been on the market closer to the ideal of perfect competition, notwithstanding market manipulation by central bank said. According to the Bank for International Settlements, [2] average daily turnover in global foreign exchange market at $ 3.98 trillion. Trading in the largest financial centers in the world markets, the $ 3.21 trillion this. That's about $ 3.21 trillion in main foreign exchange market turnover was broken down as follows:

* $ 1.005 trillion in spot transactions
* $ 362 billion on direct forward
* $ 1.714 trillion in foreign exchange swaps
* $ 129 one billion estimated gaps in reporting

What Is Forex?

The foreign exchange (also known as "forex" or "FX") market is the place where currencies are traded. The overall 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 the world.

Investopedia Says:
There is no central marketplace for currency exchange, rather, trade is conducted over-the-counter. The forex market is open 24 hours a day, five days a week, with currencies being traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - spanning most time zones.

The forex is the largest market in the world in terms of the total cash value traded, and any person, firm, or country may participate in this market.