1 / 16

World Finance

World Finance. Key Vocabulary: Foreign Exchange and International Financial Markets. Appreciation. When a currency’s value increases in terms of another currency. Currency. Another word for money. Exchange Rate. How much one currency is worth in terms of another currency. Depreciation.

ailish
Download Presentation

World Finance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. World Finance Key Vocabulary: Foreign Exchange and International Financial Markets

  2. Appreciation When a currency’s value increases in terms of another currency.

  3. Currency Another word for money.

  4. Exchange Rate How much one currency is worth in terms of another currency.

  5. Depreciation When a currency’s value decreases in terms of another currency.

  6. Fixed Exchange Rate An exchange rate that the government pegs its currency’s value relative to another currency, a group of currencies, or another measure of value, such as gold. Fixed exchange rates tend to help keep inflation in check but tend to hide a currency’s true market value.

  7. Floating Exchange Rate An exchange rate that is allowed to vary. With a floating exchange rate, the value of the currency is determined by buying and selling the currency in the FX market.

  8. Foreign Exchange Market The largest trading market in the world, where currency trading takes place. It is also called the FX, forex, or currency market.

  9. Forward Transaction A currency trade in which one party agrees to sell, and the other party agrees to buy, a particular currency at an agreed exchange rate on a specific date in the future.

  10. Hedging Techniques aimed at minimizing the business risks arising from FX fluctuations.

  11. Inflation A rise in prices due to the decline of a currency’s value. Inflation causes a decline in the value of a currency as measured by purchasing power parity (PPP).

  12. Market Psychology The emotions and beliefs of traders on the FX market that influence exchange rates.

  13. Options A currency trade in which both parties agree to trade only if the currencies reach a fixed, or strike, price.

  14. Spot Transaction A currency trade that happens immediately, at the current exchange rate.

  15. Strong Currency A currency with a value (in terms of other currencies) that is high and that tends to rise.

  16. Weak Currency A currency with a value (in terms of other currencies) that is low and that tends to fall.

More Related