Forex

Exotic Currency Definition

Exotic Currency is a thinly traded currency.  These currency pairs are traded by pure speculators.  Unlike the major currencies, Euro, US Dollar, etc.

What is the Euro Libor?

The Euro Libor is the Libor rate denominated in Euro.  The current Euro Libor rate is quoted based on the average of rates across sixteen European banks.  The Euro Libor represents the short-term lending rate that banks extend to each other on a daily basis.  This rate is set by a small group of wealthy London banks on a daily bas

What is a Xenocurrency?

A xenocurrency is a currency which trades outside of its home country.  The name sounds a bit strange, but that is because the root word "Xeno" means foreign or strange, hence the name name xenocurrency.  When a xenocurrency is deposited in another country, it is called and quoted in eurocurrency as the Euro is the most valuable currency in the world.  It was once feared that inflation would be on the rise because there were too many central banks holding part of their reserves in xenocurrencies.  Banks got involved in the practice in the first place because reserve requirements and

An authorized forex dealer is any financial institution that has received approval from a regulatory body to act as a dealer for the act of buying and selling currencies.  In the United States the National Futures Association (NFA) is responsible for registering and auditing entities involved in t

What is the Currency Carry Trade?

The currency carry trade is created by simply borrowing funds at a low rate and investing these funds into higher yielding assets.  A very relevant example can be seen in the famous "yen carry" trade in which Japanese Yen are borrowed at an interest rate which is next to nothing and invested into higher yielding US 

When you hear the term big figure in the forex world; the person is referring to the non-pip portion of the price quote.  The term big figure is also referred to as a "handle".  For example, the EUR/USD is currently trading at 1.5842 and the big figure would be 1.58.  The fourth and fifth digits measure the number of