There are many instances when we hear or read numerous words and phrases, but are rather uncertain of their exact meaning. The foreign exchange is only one part of the financial world of many sections, each of which seems to have its own expressions and jargon, as if it was all designed only for those with professional or specialised knowledge of the subject.
Of course, other trades have their own language, like the legal boys for instance.
It is not too difficult to get to know what it all means, and if one can learn some of the important words and expressions, it makes life that much easier.
Here are a few expressions you will run into, the answers to which you may find useful:
1. World Bank: The bank consists of IMF members, and helps by making loans to member countries, particularly when money from the private sector is not offered.
2. Bank Rate: This refers to the rate at which a central bank will lend to its domestic banks.
3. Basis Point: One per cent of one per cent
4. Cable: The foreign exchange market reference for the USD/ GBP
5. Consumer Confidence: This is an indicator of economic conditions run by the Conference Board. All over the country, some 5000 consumers are surveyed monthly, the degree of confidence being associated with the volume of consumer spending.
6. Covered Call: The Foreign Exchange Market uses this name for the rate USD/GBP
7. Cross Rate: This is a rate between two currencies of which neither is the USD
8. CHIPS: Clearing House Interbank Payments System.
9. Disposable Income: Money earned after tax.
10. Eurodollars: USD on deposit in a bank outside of USA.
11. LIBOR: London Interbank Offered Rate.
12. Liquid Assets: These are various assets which can be quickly converted into cash.
13. Easing: A price decline.
14. Economic Indicator: Data indicating economic growth, taking into account for example, retail sales, employment, rates, etc.
15. Liquidity: The competence of a market to undertake sizable transactions.
16. Resistance Level: A summit of a price level at which point the supply is greater than the demand.
17. Bull Market: A period of time when prices are seen to be rising.
18. Bear Market: A period of time when prices are seen to be falling.
19.Market Rate: Is the up- to- date quote of a currency pair.
20. Pip: refers to the 4th decimal point i.e.0.0001 of any foreign currency.
21. Fill Price: This is the price at which the order for buy or sell was executed.
22. Households Survey: The number of people that are employed, the labour force in general, and the rate of unemployment.
