Finance - Currency

Currency jargon is used all the time by foreign exchange agencies and dealers whose main object is to exploit margins for their own gains when transferring or changing money for people.

Banks are a master at maximising the profit contained within the buy and sell price of a particular currency. Many people call them rip off agents and this currency jargon buster will regretfully not help you to minimise this fact.

This currency jargon directory will merely assist you in understanding some of the more commonly used terms.

Currency Jargon.

"BEAR MARKET"

A MARKET WITH A DOWNWARD TREND INDICATING LOWER PRICES

"BULL MARKET"

MEANS A MARKET WHERE THE PRICE IS MOVING HIGHER

EMS

EUROPEAN MONETARY SYSTEM

EMU

EUROPEAN MONETARY UNION

"EXCHANGE RATE"

MEANS HOW MUCH OF A FOREIGN CURRENCY YOU WILL GET FOR 1 UNIT OF YOUR OWN CURRENCY

FOREX OR FX

THESE TERMS ARE USED AS AN ABBREVIATION OF FOREIGN EXCHANGE

"FORWARD RATE"

THIS IS THE RATE WHICH IS FIXED ON THE DAY FOR A SPECIFIC DATE IN THE FUTURE

"INTERBANK RATE"

THIS IS THE TERM FOR THE RATES TRADED EXSCLUSIVELY BETWEEN INTERNATIONAL BANKS AROUND THE WORLD AND IS NOT AVAILABLE TO THE PUBLIC DOMAIN

"MARGIN"

THE DEPOSIT REQUIRED TO TRADE A FORWARD TRANSACTION

"MATURITY"

THE DATE OF SETTLEMENT AND EXCHANGE OF FUNDS

"SPOT RATE"

WHEN A DEAL IS TRANSACTED ON THE DAY FOR SETTLEMENT IN 2 WORKING DAYS

"SETTLEMENT"

ACTUAL EXCHANGE OF FUNDS ON THE DAY OF MATURITY

"VALUE DATE"

THE DATE OF SETTLEMENT FOR EITHER A SPOT OR FORWARD CONTRACT

ADD YOUR OWN JARGON TO THIS SECTION:-