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Glossary

Cable

The British pound/US Dollar exchange rate GBP/USD.

Candlestick chart

A chart that displays the daily trading price range (open, high, low and close). A form of Japanese charting that has become popular in the West. A narrow line (shadow) shows the day's price range. A wider body marks the area between the open and the close. If the close is above the open, the body is white (not filled); if the close is below the open, the body is black (filled).

Central bank

A bank, administered by a national government, which regulates the behavior of financial institutions within its borders and carries out monetary policy.

Chartist

A person who attempts to predict prices by analyzing past price movements as recorded on a chart.

Closing a position

The process of selling or buying a foreign exchange position resulting in the liquidation (squaring up) of the position.

Closing market rate

The rate at which a position can be closed based on the market price at end of the day.

Commission

Brokers bonus for facilitating transactions.

Confirmation

Written acknowledgment of a trade, listing important details such as the date, the size of the transaction, the price, the commission, and the amount of money involved.

Confirmation

Completed transaction reflected in the transaction description document.

Consumer Price Index (CPI)

US index, calculated once a month. It indicates the price dynamics of the basket purchased by an average consumer. One of the most important inflation indicators.

Correspondent bank

The foreign banks representative who regularly performs services for a bank which has no branch in the relevant centre, e.g. to facilitate the transfer of funds. In the US this often occurs domestically due to inter state banking restrictions.

Counterpart

A participant in a financial transaction.

Cover

1. To take out a forward foreign exchange contract. 2. To close out a short position by buying currency or securities which have been sold.

Cross rates

Two curency exchange rate set in relations of each of them towards the third currency. For instance, for EUR/CHF pair EUR/USD and USD/CHF quotes are used.

Cross-rate

The exchange rate between 2 currencies where neither of the currencies are USD.

Currency

Money issued by a government. Coins and paper money. It is a form of money used as a unit of exchange within a country.

Currency basket

A selection of foreign currencies, which is used as a guiding line by regulative institutions when shaping a national currency rate against other currencies.

Currency Intervention

Central bank intervention in the operations on the currency market in order to raise or lower the rate of the national currency by selling/buying foreign currency. A reduced rate of the national currency can be achieved through the purchase of foreign currency; increased rate is achieved through foreign currency sales.

Currency pair

A conversion operation object based on the change of one currency rate against another. The example of the currency pair is USD/JPY.

Currency risk

The risk that shifts in foreign exchange rates may undermine the dollar or any other foreign currency value of overseas investments.

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