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.