FOREX Money Trader
| Foreign Currency Exchange Information: Forex Terms and Definitions for the Letter "A" |
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| "Currency Knowledge That's Empowering" |
ABA – American Bankers Association
ABA Code – A nine digit bank code assigned by the American Bankers Association, used in the USA.
Accrual - The apportionment of premiums and discounts on forward exchange transactions that relate
directly to deposit swap (Interest Arbitrage) deals , over the period of each deal.
Actualize - The underlying assets or instruments which are traded in the cash market.
Actuals - The underlying assets or instruments that are traded in the cash market.
Adjustable Peg - Term for an exchange rate regime where a country's exchange rate is "pegged" (i.e. fixed)
in relation to another currency, often the dollar or French Franc, but where the rate may be changed from time
to time. This was the basis of the Bretton Woods system. See peg, and crawling peg.
Adjustment - Official action normally by either change in the internal economic policies to correct a payment
imbalance or in the official currency rate or. Adjustment - Official action normally by either change in the
internal economic policies to correct a payment imbalance or in the official currency rate or.
ADP Nonfarm Employment Change - Measures the change in number of employed people during the
previous month, excluding the farming industry.
Agent Bank - (1) A bank acting for a foreign bank. (2) In the Euro market - the agent bank is the one
appointed by the other banks in the syndicate to handle the administration of the loan.
Aggregate Demand - Total demand for goods and services in the economy. It includes private and public
sector demand for goods and services within the country and the demand of consumers and and firms in
other countries for good and services.
Aggregate risk - Size of exposure of a bank to a single customer for both spot and forward contracts.
Aggregate Supply - Total supply of goods and services in the economy from domestic sources (including
imports) available to meet aggregate demand.
Agio - Difference in the value between currencies. Also used to describe percentage charges for conversion
from paper money into cash, or from a weak into a strong currency.
All Industries Activity Index - Measures the change in spending for goods and services. This indicator is
similar to the Tertiary Industry Activity Index released a few days prior, but it adds data from the primary
sector, including fishing, farming, forestry, mining, and manufacturing.
Appreciation - Describes a currency strengthening in response to market demand rather than by official
action.
Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position
in a related market, in order to take advantage of small price differentials between markets.
Arbitrage channel - The range of prices within which there will be no possibility to arbitrage between the
cash and futures market.
Around - Used in quoting forward "premium / discount". "Five-five around" would mean five point on either
side of the present spot value.
Asset Allocation - Investment practice that divides funds among different markets to achieve diversification
for risk management purposes and/or expected returns consistent with an investor’s objectives.
Ask (Offer) Price - The price at which the market is prepared to sell a specific Currency in a Foreign
Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the
quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the
ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.Asset - In the context of
foreign exchange is the right to receive from a counterparty an amount of currency either in respect of a
balance sheet asset (e.g. a loan) or at a specified future date in respect of an unmatched forward Forward or
spot deal.
At best - An instruction given to a dealer to buy or sell at the best rate that can be obtained.
At or Better - An order to deal at a specific rate or better.
At-the-money - An option contract with a strike price at (or very close to) the underlying rate; also, the
closest strike price to the underlying rate.
Authorized Dealer - A financial institution or bank authorized to deal in foreign exchange.
Average Cash Earnings - Measures the monthly change in the wages paid to jobholders.
Average Earnings Index - The Average Earnings Index (AEI) measures the average wage, including
bonuses, paid to employees. The indicator reading represents the change in the current quarter when
compared to the same quarter in the previous year.
Average Hourly Earnings - Measures the rate of inflation found in the wages paid to nonfarm jobholders. A
rising trend has a positive effect on the nation's currency. When businesses pay more for labor, they are likely
to pass the higher costs to the consumer, so traders view wage inflation as a leading indicator of consumer
inflation.
ABA Code – A nine digit bank code assigned by the American Bankers Association, used in the USA.
Accrual - The apportionment of premiums and discounts on forward exchange transactions that relate
directly to deposit swap (Interest Arbitrage) deals , over the period of each deal.
Actualize - The underlying assets or instruments which are traded in the cash market.
Actuals - The underlying assets or instruments that are traded in the cash market.
Adjustable Peg - Term for an exchange rate regime where a country's exchange rate is "pegged" (i.e. fixed)
in relation to another currency, often the dollar or French Franc, but where the rate may be changed from time
to time. This was the basis of the Bretton Woods system. See peg, and crawling peg.
Adjustment - Official action normally by either change in the internal economic policies to correct a payment
imbalance or in the official currency rate or. Adjustment - Official action normally by either change in the
internal economic policies to correct a payment imbalance or in the official currency rate or.
ADP Nonfarm Employment Change - Measures the change in number of employed people during the
previous month, excluding the farming industry.
Agent Bank - (1) A bank acting for a foreign bank. (2) In the Euro market - the agent bank is the one
appointed by the other banks in the syndicate to handle the administration of the loan.
Aggregate Demand - Total demand for goods and services in the economy. It includes private and public
sector demand for goods and services within the country and the demand of consumers and and firms in
other countries for good and services.
Aggregate risk - Size of exposure of a bank to a single customer for both spot and forward contracts.
Aggregate Supply - Total supply of goods and services in the economy from domestic sources (including
imports) available to meet aggregate demand.
Agio - Difference in the value between currencies. Also used to describe percentage charges for conversion
from paper money into cash, or from a weak into a strong currency.
All Industries Activity Index - Measures the change in spending for goods and services. This indicator is
similar to the Tertiary Industry Activity Index released a few days prior, but it adds data from the primary
sector, including fishing, farming, forestry, mining, and manufacturing.
Appreciation - Describes a currency strengthening in response to market demand rather than by official
action.
Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position
in a related market, in order to take advantage of small price differentials between markets.
Arbitrage channel - The range of prices within which there will be no possibility to arbitrage between the
cash and futures market.
Around - Used in quoting forward "premium / discount". "Five-five around" would mean five point on either
side of the present spot value.
Asset Allocation - Investment practice that divides funds among different markets to achieve diversification
for risk management purposes and/or expected returns consistent with an investor’s objectives.
Ask (Offer) Price - The price at which the market is prepared to sell a specific Currency in a Foreign
Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the
quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the
ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.Asset - In the context of
foreign exchange is the right to receive from a counterparty an amount of currency either in respect of a
balance sheet asset (e.g. a loan) or at a specified future date in respect of an unmatched forward Forward or
spot deal.
At best - An instruction given to a dealer to buy or sell at the best rate that can be obtained.
At or Better - An order to deal at a specific rate or better.
At-the-money - An option contract with a strike price at (or very close to) the underlying rate; also, the
closest strike price to the underlying rate.
Authorized Dealer - A financial institution or bank authorized to deal in foreign exchange.
Average Cash Earnings - Measures the monthly change in the wages paid to jobholders.
Average Earnings Index - The Average Earnings Index (AEI) measures the average wage, including
bonuses, paid to employees. The indicator reading represents the change in the current quarter when
compared to the same quarter in the previous year.
Average Hourly Earnings - Measures the rate of inflation found in the wages paid to nonfarm jobholders. A
rising trend has a positive effect on the nation's currency. When businesses pay more for labor, they are likely
to pass the higher costs to the consumer, so traders view wage inflation as a leading indicator of consumer
inflation.
Words and Acronyms that start with the letter "A"
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| Copy Right 2008 |