Reference

An exchange rate regime where a currency is allowed to fluctuate within a range that is adjusted periodically by the central bank.

A financial strategy that involves exploiting differences in currency exchange rates across different global markets to secure a risk-free profit. Traders quickly buy a currency at a lower price in one venue and simultaneously sell it at a higher price in another.

A fall in the value of a currency in a floating exchange rate system due to market forces.

A policy in which a national government sets a specific fixed exchange rate for its currency with a foreign currency or a basket of currencies.

The potential for loss caused by changes in exchange rates when investing in assets denominated in foreign currencies.

A financial agreement where two parties exchange the principal and interest payments of a loan in one currency for those in another currency. It is often used by companies to reduce borrowing costs or manage exposure to exchange rate fluctuations.

A deliberate downward adjustment of a country's official exchange rate relative to another currency. This is usually performed by a central bank in a fixed exchange rate system.

The value of one nation's currency versus the currency of another nation or economic zone. It determines how much of one currency is needed to buy another.

The possibility that an investment's value will decrease due to changes in the relative value of the currencies involved.

A regime where the official value of a country's currency is pegged to another country's currency or to the price of gold. It is maintained by the central bank through market intervention.

A regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. Most major global economies use this system.

Assets held by a nation's central bank in foreign currencies to back its liabilities and influence its own exchange rate.

Foreign Exchange Market — A global marketplace where national currencies are traded against one another to determine exchange rates. It is the largest and most liquid financial market in the world.

An exchange rate agreed upon today for a currency transaction that will occur on a specific date in the future.

A financial strategy used to reduce or eliminate the risk of capital loss from unfavorable movements in exchange rates.

The smallest price movement in the exchange rate of a currency pair, usually represented by the fourth decimal place.

An economic theory that compares different countries' currencies through a 'basket of goods' approach. It suggests that exchange rates should adjust so that the same goods cost the same in different countries.

The exchange rate between two currencies adjusted for the relative price levels or inflation rates in both countries.

A deliberate upward adjustment of a country's official exchange rate. This increases the value of the domestic currency relative to foreign currencies in a fixed system.

The current exchange rate at which a currency pair can be bought or sold for immediate delivery.