A rise of a currency relative to another currency in a floating exchange rate. Appreciation is typically used to describe long-term revaluation of currencies as opposed to daily or short-term price fluctuations.

The name of an electronic network for financial transactions in the United States. ACH processes large volumes of both credit and debit transactions which are originated in batches (debit card transactions, direct deposit of payroll, social security and other government benefits, tax refunds, direct debit payments, e-commerce payments, etc.). Typically, payments made via ACH are not time-sensitive and may take a day or two longer to complete than Fedwire payments.

An automatic fill order allows you to set the price you wish to buy or sell foreign currency in the future - your target price. When the market hits your target price setfor your automatic fill order, your order is automatically filled. You may set a high and a low price as well and whichever price hits first that order will be filled and the other order will be automatically deleted.

A United Kingdom scheme for the electronic processing of financial transactions (direct debits and BACS direct credits). BACS payments take three working days to clear.

The first currency in a currency pair which other currency is quoted against. The second currency is named the quote currency, counter currency or terms currency.

The old term for a SWIFT. The term is still in common use. (See “SWIFT(BIC)” below).

The entity responsible for the monetary policy of a country or a group of member states. Its responsibilities include: to maintain the stability of the national currency and money supply, to control subsidized-loan interest rates and act as a lender of last resort to the banking sector during times of financial crisis.

London-based, a Real Time Gross Settlement Funds Transfer System in the United Kingdom, which offers same-day sterling and euro fund transfers.

The main privately held clearing house for large-value transactions in the United States, settling well over US$1 trillion a day in around 250,000 interbank payments.

A forward contract where the settlement date is fixed on a particular date in the future. Closed forward contracts are often used to meet date-sensitive future payment obligations.

A measure of the average price of consumer goods and services purchased by households. The percent change in the CPI is a measure of inflation. The CPI can be used to adjust for the effects of inflation wages, salaries, pensions, or regulated or contracted prices.

A term used to describe conforming to and fulfilling regulations regarding financial transactions established by Financial Crimes Enforcement Network United States Department of the Treasury, The USA Patriot Act and the Bank Secrecy Act. It is the policy of Venstar Exchange to prohibit and actively pursue the prevention of money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities.

The ability to freely exchange one currency into another currency. Some countries pass laws restricting the legal exchange rates or requiring permits to exchange more than a certain amount.

A medium of exchange of value defined by reference to the geographical location of the authorities responsible for it. A currency is represented by a three-character ISO code.

Exchange rate relationship between two currencies, where one currency is expressed in terms of the other. For example, USD-EUR (US dollar against Euro) is a currency pair.

A fall (decrease) in the value of a currency relative to another currency in a floating exchange rate. Depreciation is typically used to describe long-term revaluation of currencies as opposed to daily or short-term price fluctuations.

A payment system that allows to settle payments electronically via secure debits from an authorized bank account.

The interest rate which the Federal Reserve charges to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

A check guaranteed by a financial institution. A draft check features the name of the issuing bank and is generally produced with enhanced security features.

Established by the European Union in 1998 and with headquarters Frankfurt, Germany, the European Central Bank is responsible for monetary policy of the 15 member countries of the Eurozone.

The computer-based systems used to perform financial transactions electronically. The term refers to a number of different concepts (payment by credit or debit card, direct deposit payments, electronic bill payments, wire transfer, etc.).

The price of one foreign currency in terms of the local currency.

The Euro, introduced electronically in 1999 and with bank notes in 2002, is the single currency for the Eurozone which currently comprises of Belgium, Germany, Greece, Spain, France, Ireland, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia and Finland. The Euro is also the currency used in Andorra, Kosovo, Monaco, Montenegro, San Marino, the Vatican City and the following French territories: Mayotte, Saint Pierre and Miquelon, and Saint-Martin.

The interest rate banks charge one another for overnight lending to cover reserve requirements. The Federal Funds rate is often affected by the Federal Reserves monetary policy.

The central banking system of the United States, which overseas commercial and savings banks in the practice of Federal Reserve policies. The body also acts as a depository for member banks and provides money transfer and other services such as check clearing. The Federal Reserve sets the discount interest rate and expands or contracts the availability of credit.

A component of the Federal Reserve System, charged with overseeing open market operations (buying and selling of government securities) in the United States and is the principal tool of US national monetary policy. The Committee sets monetary policy by specifying the short-term objectives. The FOMC also directs operations in foreign exchange markets, although any intervention in foreign exchange markets is coordinated with the U.S. Treasury, which has responsibility for formulating U.S. policies regarding the exchange value of the dollar.

A Real Time Gross Settlement Funds Transfer System operated by the US Federal Reserve Banks that enables financial institutions to electronically transfer funds between its participants.

Government policy that attempts to influence the direction of the economy through changes in government taxes and through spending.

A type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold. As the reference value rises and falls, so does the currency pegged to it.

A type of exchange rate regime wherein a currency's value is allowed to fluctuate ("float") according to the foreign exchange market's activity. A currency that uses a floating exchange rate is known as a floating currency.

Financial market where one currency is traded for another. It is the largest and most liquid financial market, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.

A foreign exchange contract where one is able to buy or to sell a specific amount of foreign currency, for a specific date in the future ranging from one month to two years (depending on the currency pair), at a specific rate of exchange. Entering into a forward contract eliminates the risk of future rate volatility.

The seven leading industrial countries: U.S., Germany, Japan, France, U.K., Canada, and Italy.

A globally traded strong currency with long-term stability that can serve as a reliable and stable store of value. Factors contributing to a currency's hard status can include political stability, low inflation, consistent monetary and fiscal policies, and long-term stable valuation against other currencies. As of 2008, hard currencies could be argued to include US dollar, euro, Swiss franc, British pound sterling, Norwegian krone, Swedish krona, Canadian dollar, Japanese yen, and Australian dollar.

A financial strategy designed to minimize exposure to an unwanted business risk through the use of foreign exchange instruments such as forward contracts, futures, and options.

An international standard for identifying bank accounts across national borders. The IBAN was developed to facilitate payments within the European Union. Currently all European non-CIS countries, as well as some African countries, and Turkey participate in the IBAN system, while the rest of the world remains outside of it. The IBAN always starts with a two-digit country code which is followed by a two-digit control part, a reference to the bank (the bank's local code) and the beneficiary's domestic account number. It is up to each country's national banking community to decide on the length of the domestic account numbers in that country, but its length must be fixed for any given country. The IBAN must not contain spaces when stored electronically. When printed on paper, however, the norm is to express it in groups of four characters, the last group being of variable length.

Foreign exchange rates large international banks quote other large international banks (for transactions over one million US dollars). Interbank rates are different from retail rates.

The international standard describing three-letter currency codes to define the names of currencies established by the International Organization for Standardization (ISO). The code (first two letters referring to a country code and the last letter referring to the first letter of the currency name; e.g. GBP - Great Britain Pound) was introduced to remove confusion that there are dozens of currencies called the dollar, franc and even pound.

The amount of deposit needed to secure a forward transaction. Venstar Exchange requires a margin of 10% of the value of the transaction to be paid on the day the transaction is agreed. On the settlement date the balance of 90% would be paid.

A term used to describe the overall global foreign currency trading between banks, companies, and governments.

Sustained movements in market prices over a period of time. The terms "bull market" and "bear market" described upward and downward movements respectively. The expressions "bullish" and "Bearish" mean optimistic and pessimistic respectively.

Policy of governments, central banks and monetary authorities that is set to control the supply of money, availability of money, and cost of money or rate of interest in order to provide for the growth and stability of the economy.

Engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful proceeds appear to have been derived from legitimate origins or constitute legitimate assets.

An agency of the United States Department of the Treasury that administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign states, organizations, and individuals.

A forward contract where the settlement date is not fixed but is between two agreed dates in the future (a "window" of time). Window forwards are often used when there is uncertainty regarding the actual payment date.

The smallest measure of price move used in foreign exchange trading. Most currencies are quoted in five digit figures, irrespective of the position of the decimal point. For instance, if the currency pair EUR/USD is currently trading at 1.5600 and then the exchange rate changes to 1.5610, the pair did a 10 pips move.

The interest rate charged by commercial banks for short-term loans to the bank's best customers. The prime rate is often affected by changes in the Federal Funds rate.

A routing transit number (RTN), or routing number, or ABA number (for the American Bankers Association) is a nine digit bank code, used in the United States, which appears on the bottom of checks that identifies which financial institution it is drawn upon. This code is also used by the Automated Clearing House to process direct deposits and other automated transfers. The routing number is derived from the bank's transit number originated by the American Bankers Association.

An account opened in the name of the client and for the sole use of the client in which currencies purchased can be held until instructions are received to pay monies away.

The process whereby currencies are delivered to a beneficiary account to fulfill contractual obligations of currency purchase/sale.

An industry term describing the date on which a trade of currencies settles. That is, the agreed date on which client should ensure cleared funds have been paid to the Company and the day on which the Company, having received cleared funds, will arrange to pay foreign currency to a beneficiary account.

A foreign exchange trading term describing the process of purchasing or selling foreign currency in an effort to profit from exchange rate movements.

A foreign exchange trading term describing the process of conducting a transaction for immediate delivery of the funds as opposed to a future date. A spot contract allows you to buy/sell foreign currency at today's exchange rate, with settlement occurring two business days later.

A dedicated computer network that is designed to support fund transfer messages between their member banks worldwide. (See also “SWIFT(BIC)” below)

Also know as ISO 9362, SWIFT-BIC or BIC code, SWIFT code is a standard format of Bank Identifier Codes approved by the International Organization for Standardization (ISO). It is the unique identification code of a particular bank. These codes are used when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks. The codes can sometimes be found on account statements. The SWIFT code is 8 or 11 characters, made up of: 4 characters - bank code (only letters), 2 characters - country code (only letters), 2 characters - location code (letters and digits) (if the second character is '1', then it denotes a passive participant in the SWIFT network), 3 characters - branch code, optional ('XXX' for primary office) (letters and digits). Where an 8-digit code is given, it may be assumed that it refers to the primary office.

A method of electronically transferring money from one entity to another. Bank Wire Transfer is the safest, most reliable method of transferring funds worldwide. The sending bank transmits a message, via a secure encrypted system (such as SWIFT for international wires), to the receiving bank, requesting to initiate a payment according to the instructions given. Both banks involved must hold reciprocal accounts with each other, or the payment is sent through a corresponding bank for further benefit of the recipient.