Foreign Exchange

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.

Base Currency

Base Currency is a market-structure term used in trading venues, intermediaries, liquidity, listings, orders, or price formation.

Blocked Funds

Blocked Funds are money that cannot be transferred to another country due to exchange controls imposed by a government.

British Pound (GBP)

The British Pound (GBP), also known as Pound Sterling, is the official currency of the United Kingdom. It is one of the oldest and most traded currencies in the world.

Controls & Convertibility

Foreign-exchange policy terms for currency convertibility, blocked funds, exchange restrictions, and IMF scarce-currency rules.

Convertibility

Convertibility refers to the ability of a country's currency to be freely exchanged for foreign currencies.

Cross Rate

A cross rate is an exchange rate between two currencies, often derived through their rates against a third currency.

Cross-Border Portfolios

Portfolio pages for foreign portfolio investment, offshore structures, global equity exposure, and special listed portfolio products.

Currency

Currency is money issued or accepted for payment, pricing, settlement, reserves, and foreign exchange trading.

Currency Conversion

Currency conversion exchanges one currency for another using an applicable spot, card, bank, or market rate.

Currency Pair

A currency pair quotes one currency's value in terms of another currency in the foreign exchange market.

Regimes & Pegs

Currency-regime terms for floating rates, managed floats, pegs, bands, crawling pegs, and multiple exchange-rate systems.

Currency Speculation

Currency Speculation involves trading in foreign exchange markets with the aim of profiting from short-term fluctuations in currency values.

Currency Symbol

A Currency Symbol is a graphical representation that denotes a specific currency.

Currency Unions

Currency-union terms for optimal currency areas, single currencies, the eurozone, ERM, narrow-band ERM, and snake-in-the-tunnel arrangements.

Valuation & Devaluation

Currency terms for appreciation, depreciation, devaluation, revaluation, misalignment, overvaluation, undervaluation, and realignment.

Deliverable Forwards

Deliverable forwards are a type of forward contract that involves the physical delivery of the underlying currency.

Direct Quote

A direct quote expresses a foreign currency price in units of the domestic currency.

EURO

The euro is the official currency of the Eurozone, adopted by many European Union countries for ease of trade and economic stability.

Eurocurrency

Eurocurrency is currency deposited or borrowed outside the country that issues it.

Eurocurrency Market

The eurocurrency market is the offshore market for deposits and loans denominated in currencies outside their home jurisdictions.

Eurodollar Market

Eurodollar Market is a market-structure term used in trading venues, intermediaries, liquidity, listings, orders, or price formation.

Eurozone

The eurozone is the group of European Union countries that share the euro and monetary policy through the ECB.

Intervention & Controls

Economics pages on currency intervention, exchange-rate manipulation, sterilization, managed currencies, and foreign-exchange controls.

Exchange Rate Mechanism (ERM)

The exchange rate mechanism was a European currency arrangement that limited exchange-rate movements before monetary union.

Systems & History

Historical and structural pages on adjustable pegs, target zones, dirty floating, Bretton Woods, Smithsonian parities, the dollar standard, and the macroeconomic trilemma.

FX & Currency

Economics and FX terms for exchange-rate measures, currency regimes, pegs, floats, devaluation, monetary standards, and capital controls.

Exchange Restrictions

Exchange restrictions are government limits on currency conversion, cross-border payments, capital flows, or foreign exchange transactions.

Rate Measures

Exchange-rate terms for bilateral, nominal, real, effective, official, and foreign-exchange-rate measurement.

Foreign Currency

Foreign currency is money denominated in a currency other than the domestic, functional, or reporting currency.

Foreign Exchange

Foreign Exchange, commonly referred to as FOREX or FX, involves the currencies of foreign countries as they are bought and sold in the foreign exchange market.

Foreign Exchange Instruments

Foreign exchange instruments are the various tools and documents used in the processes of making payments across different countries.

FOREX

The Foreign Exchange Market, commonly referred to as FOREX or FX, is the decentralized global marketplace for the trading of currencies.

FOREX Market

The FOREX market is a worldwide decentralized platform for determining the relative values of different national currencies through currency trading.

Forex Trading

The Foreign Exchange Market, commonly referred to as Forex or FX, is a decentralized global marketplace where the world's currencies are traded.

Forward Points in Currency

Forward points are the rate adjustments added to or subtracted from a spot FX rate to derive a forward rate.

FX

FX is the foreign exchange market for trading, pricing, hedging, and settling currency exposures.

Global Equity

Global equity exposure invests in stocks across multiple countries, broadening the opportunity set while adding currency and country risk.

Indirect Quote

An indirect quote in foreign exchange markets expresses the amount of foreign currency required to buy or sell one unit of the domestic currency.

Interest Rate Differential

Interest rate differential is the gap between two currencies' interest rates, influencing forwards, carry trades, and hedging cost.

ISO Currency Code

An ISO currency code is a three-letter standard identifier used to label currencies in markets, payments, and data systems.

Currency Systems

Currency-system terms for fiat money, legal tender, national currency, hard and soft currencies, gold standards, dollarization, and petrodollars.

Monetary Union

A monetary union is an arrangement in which countries share a currency, central bank, or closely coordinated monetary policy.

Narrow-Band ERM

A narrow-band ERM is an exchange-rate mechanism that allows currencies to move only within tight bands around agreed central rates.

Optimal Currency Area

An optimal currency area is a region where sharing one currency is economically efficient because adjustment costs are manageable.

Outward Arbitrage

Outward arbitrage is a foreign-exchange strategy that shifts funds to overseas money markets when covered returns are more attractive.

Pip

In forex trading, a pip is the standard small price increment used to quote exchange-rate movements and measure trade gains or losses.

Pips in Forex Trading

A pip is a small standardized price increment used to measure movements in foreign exchange rates.

Quote Currency

Quote currency is the second currency in a currency pair and shows the price of one unit of the base currency.

Scarce Currency Clause

The scarce currency clause is an IMF rule concept addressing shortages of a currency needed for international payments.

Single Currency

A single currency is a shared monetary unit used across multiple jurisdictions, usually requiring common monetary governance.

Snake in the Tunnel

Snake in the tunnel was a European exchange-rate arrangement that kept participating currencies within narrow bands.

Trading Currency

Trading currency is the currency used to quote, trade, settle, or denominate a financial transaction or market.

Triangular Arbitrage

Triangular arbitrage uses three currency trades when quoted exchange rates imply an inconsistent cross-rate after spreads and costs.

United States Dollar Index (USDX)

United States Dollar Index (USDX) is a market-structure term used in trading venues, intermediaries, liquidity, listings, orders, or price formation.

USD

The abbreviation 'USD' stands for the United States Dollar, the official currency of the United States and the world's primary reserve currency.

Xenocurrency

A xenocurrency is a currency deposited, traded, or used outside the country that issues it.

Yen

The yen is Japan's currency and a major foreign exchange reserve, funding, and trading currency.

Revised on Sunday, June 21, 2026